The construction industry in Northern Ireland is teetering on the edge of recession, according to a trade body which represents around 70% of output across the Province writes Barry Dorrity (Credit Insurance Account Executive at Autoline).
The Construction Employers Federation surveyed 80 local companies on their performance in the first half of 2019. The findings, from the State of Trade Survey, painted a bleak picture with firms predicting a recession.
There were a number of reasons for the sombre outlook including Brexit and lack of a functioning Assembly at Stormont. Without a clear path forward on Brexit it is increasingly difficult to plan for the future while the mothballed Stormont Assembly has led to a lack of public and infrastructure projects.
While a return to Government won’t solve all the problems, it would help significantly in addressing uncertainty in the market by putting in place multi-year budgets and programmes of works. Stormont funding for NI Water could also see urgent upgrades for wastewater treatment works across Northern Ireland, which could speed up new housing projects.
Construction industry in Northern Ireland
A number of businesses also have a sustainability fear with more firms now looking to the future with concern.
This year alone there have been eight significant insolvencies in the construction sector in Northern Ireland and around 60% of businesses believe the situation will only get worse over the next 12 months. Also, 48% of respondents said they were considering redundancies in the final months of 2019.
The businesses which have gone into insolvency are reported to have had unsecured creditors of millions of pounds which has affected well over 1,000 businesses.
Against such a worrying backdrop now is a good time to conduct a review of your business practices especially around working capital. The survival of the company you’ve worked so hard to build could come to rely on the financial protection you’ve bought, which is why getting credit insurance right is so important.
Credit insurance could also prove to be a lifeline for your business, giving reassurance that comes with knowing you’re protected against unexpected customer insolvency and protracted default situations.
Having a credit insurance policy is essential to manage credit risk effectively and efficiently – it helps future proof your business. Working with a highly knowledgeable insurance broker will ensure you have the right level of credit cover and a policy that is based on your unique business needs.