CEF urges Finance Minister to act on renewed construction cost pressures

30 April 2026  Business Environment 

The Construction Employers Federation (CEF) has written to the Finance Minister John O'Dowd MLA calling for urgent engagement with the Northern Ireland Executive over a renewed surge in material and supply chain costs affecting the construction sector.

In the letter, CEF, which represents around 70% of construction activity locally and over 30,000 direct employees, warns that contractors delivering public works are once again facing significant pricing instability. This follows the latest pressures and global geopolitical tensions, including disruption stemming from the Middle East, which is feeding directly into rising input costs.

CEF highlights that the current situation risks echoing the severe inflationary period experienced between 2020 and 2022, when many firms faced acute viability challenges in the aftermath of the COVID-19 pandemic. It cautions that, without intervention or structured dialogue, similar pressures could re-emerge across public sector construction contracts.

CEF also points to recent developments in the Republic of Ireland, where the construction sector has been included in the Government’s Fuel Subsidy Support Scheme, as evidence of the kind of policy response being considered elsewhere. While acknowledging that a comparable scheme in Northern Ireland would present structural and fiscal challenges, the CEF argues that it demonstrates the importance of government–industry engagement in managing cost shocks.

The letter references previous collaboration with the Department of Finance during the pandemic, including the introduction of PAN 01/21 and the incorporation of the X1 contractual clause in public sector works. The CEF says these measures showed the effectiveness of coordinated intervention during periods of extreme market disruption.

Reiterating that precedent, the CEF is now seeking to initiate a similar process of engagement with the Finance Minister, warning that dialogue will be critical in maintaining stability across the sector and protecting delivery of public infrastructure projects.

CEF Chief Executive Mark Spence commented:

“Construction firms are once again operating in a highly volatile cost environment, driven by global geopolitical instability and ongoing supply chain pressures. Without appropriate engagement and timely consideration from government, there is a real risk that these pressures will translate into delivery delays, reduced capacity, and viability challenges across the sector. We are seeking constructive dialogue with the Finance Minister to ensure the lessons from the pandemic period are carried forward and that appropriate mechanisms are considered to support stability in public sector construction delivery.”