NI Construction Industry Warns Stormont Over Price Rises

Key Points

• The Construction Employers Federation (CEF) has urged the Northern Ireland Executive to avoid “drift and delay” for the rest of the current Assembly mandate.
• The CEF’s latest survey found an “alarming” return to price increases, the worst level recorded in four years.
• Nearly all respondents (95pc) said material costs had risen by up to 25pc over the past year.
• Three-quarters of firms reported that profit margins had stagnated or fallen despite higher turnover.
• The share of firms reporting serious financial concern over inflation rose to 45pc, up from 25pc six months ago.
• The CEF wants the Executive to agree a Budget for 2026/27 and publish a multi-year Budget plan after the election.
• The federation is calling for a legally binding funding commitment for NI Water.
• CEF chief executive Mark Spence warned that underfunding NI Water could reduce the size of the economy by nearly £11bn by 2040.
• Wastewater capacity constraints are said to affect around 55,000 new homes.
• The Assembly is due to be dissolved in March 2027 ahead of elections.

Belfast (Britain Today News) August 24, 2026 — The Construction Employers Federation has called on the Northern Ireland Executive to avoid further “drift and delay” over the remainder of the current Assembly mandate, warning that a fresh wave of inflationary pressure, an unresolved Budget and an ongoing housing crisis are combining to threaten the sector’s stability. The federation’s latest industry survey has found an “alarming” return to price increases, described as the worst seen in four years, adding urgency to its call for the Executive to act before the Assembly is dissolved in March 2027 ahead of elections.

What has the Construction Employers Federation warned Stormont about?

The CEF has told the Northern Ireland Executive that the sector cannot afford further political inertia. The organisation said the pressures of rising material costs, an unresolved Executive Budget and the continuing crisis in house building meant it was

“vital that the remaining time of this NI Assembly mandate is not blighted by further political drift and delay.”

House building across Northern Ireland has been constrained for some time by a chronic lack of investment in water infrastructure, a problem the CEF says is now reaching a critical point.

Why does the CEF say political drift and delay must be avoided?

With Assembly elections scheduled for next May, the CEF argues that the run-up to the campaign risks becoming a period of inaction precisely when decisive intervention is needed. The federation said the remainder of the mandate should be used as

“groundwork for a relentless focus on delivery of the industry’s key priorities in the 2027-32 term.”

In other words, decisions taken — or not taken — in the coming months will shape the sector’s fortunes for years beyond the next election.

What did the CEF survey reveal about price increases?

The survey, which draws on data from firms headquartered in Northern Ireland with a collective annual turnover of approximately £3.5bn, paints a stark picture of cost pressures returning to the industry. Comparing the end of 2025 with the middle of 2026, some 95pc of respondents said they had seen material costs rise by up to 25pc. The CEF described this as an “alarming” development, representing the sharpest cost escalation the industry has experienced in four years.

How has inflation affected the construction industry’s finances?

While turnover has increased for most firms — with one in five reporting growth of at least 25pc — this has not translated into stronger profitability. Three-quarters of respondents said their profit margins had either remained stagnant or declined, even though the same proportion reported operating at full or almost full capacity. Meanwhile, 45pc of firms said inflationary issues were having a serious impact and causing financial concern, a sharp rise from 25pc just six months earlier. The figures suggest that although demand for construction work remains strong, rising costs are eroding the financial resilience of many firms.

What is driving the housing crisis in Northern Ireland?

The CEF has repeatedly linked the region’s house building shortfall to constraints in water and wastewater infrastructure. According to the federation, a lack of investment in NI Water’s network has left large parts of the region unable to accommodate new housing development. It said around 55,000 new homes are currently affected by some level of wastewater capacity constraint, a figure it describes as symptomatic of a “housing crisis” that cannot be resolved without fixing the underlying infrastructure problem.

What are the construction industry’s top priorities for the Executive?

The CEF has set out a clear list of priorities it wants Stormont to act on. These include agreeing a Budget for 2026/27, and laying the groundwork for a multi-year Budget to be settled immediately after next year’s election. The federation also wants the Executive to make a legally binding commitment to future funding for NI Water under the price control system, to use its existing powers to grow its own Budget, and to tackle long-standing problems within the planning system through what it called an “ambitious” Planning and Infrastructure Bill. The CEF additionally flagged ongoing skills challenges, calling for greater efforts to attract new entrants into the industry by promoting construction careers in schools and communities.

Why is a legally binding commitment to NI Water funding needed?

Central to the CEF’s demands is a call for certainty over how NI Water is funded. The federation argues that without a legal guarantee that funding will match the scale of need identified by the Utility Regulator, the current price control process will continue to fall short. This, it says, is the root cause of the capacity constraints holding back thousands of potential new homes across Northern Ireland.
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What has Mark Spence said about the NI Executive’s Budget impasse?

Mark Spence, chief executive of the CEF, was direct in his assessment of the risks facing the industry. He said:

“As we move towards next May’s elections, the overriding concern within the industry is that with the already apparent onset of the election campaign, we face a six-month period where further political drift and delay will only exacerbate the critical challenges that we face.”

He added:

“At a time when the sector is seeing the return of inflationary spikes in material costs not seen since the start of 2022, and the increasing impact this is having on project feasibility as well as company sustainability, it is vital that the NI Executive uses the months ahead to lay the groundwork for a relentless focus on delivery of the industry’s key priorities in the 2027-32 term.”

On the Budget impasse specifically, Spence said:

“The longer the impasse drags, as we know from bitter previous experience, the greater the impact on the capital budget as it relates to the procurement and awarding of new public contracts.”

He continued:

“Availability of funds without the legal authority to spend is an absurd position to be in and one that has to be immediately rectified.”

How could underfunding of NI Water affect the Northern Ireland economy?

Spence set out the long-term economic stakes of failing to resolve the water infrastructure question. He said the “underfunding” of NI Water meant that the Northern Ireland economy could be nearly £11bn smaller by 2040 — a sum equivalent to around £5,500 per household. He argued that addressing what he called

“the fundamental failing of the existing price control process”

— namely, the absence of a legal guarantee from the NI Executive to fund NI Water to the full extent of need identified by the Utility Regulator — could begin to reverse the housing crisis. As he put it:

“Addressing the fundamental failing of the existing price control process — the lack of a legal guarantee from the NI Executive to fund it to the totality of the need set by the Utility Regulator — can begin to reverse our housing crisis which, today, sees a potential 55,000 new homes affected by some level of wastewater capacity constraint.”

What happens next for the construction industry and Stormont?

With the Assembly due to dissolve in March 2027 ahead of elections next May, the CEF’s message is that the intervening period represents a narrowing window for decisive action. The federation has framed the coming months as a test of whether the Executive can agree a Budget, commit to long-term NI Water funding, and progress planning reform before political attention shifts fully to the election campaign. For an industry navigating rising material costs, squeezed margins and a housing shortfall tied directly to infrastructure capacity, the CEF’s position is that further delay carries a cost that will be measured not just in missed opportunities, but in billions of pounds of lost economic output over the next decade and a half.