Business Irish

Friday 24 March 2017

Record building slump to cost 52,000 more jobs

Paul Melia

Paul Melia

JUST 8,500 new homes will be built across the State this year, the lowest number since records began.

An independent report commissioned by the Department of the Environment forecasts that another 52,000 construction and related jobs will be lost next year.

And it says that unless the Government starts investing in public infrastructure, it is difficult to see the construction industry recovering in the "short to medium" term.

The report says that activity and employment levels are expected to bottom out in 2011, but that opportunities exist for firms working on improving the energy efficiency of buildings and in home improvements.

But with the Government slashing spending on capital projects, it is difficult to see the industry recovering any time soon.

Reduction

Government spending on capital projects is 24pc behind target, suggesting the public sector may not spend its budgets over the next two years.

"The situation with respect to the public finances is taking its toll on public sector construction, where the picture is one of a number of large projects finishing up with few projects emerging to take their place," it said. "This trend has been exacerbated by the reduction in the public capital programme over the past two years.

"Unless innovative funding mechanisms emerge to fund sensible projects in these areas, it is difficult to see where recovery in construction will come from in the short- to medium-term."

The Construction Industry Review 2009 and Outlook 2010-2012 from DKM Economic Consultants, expects another 52,000 construction and related jobs to be lost next year, with the number employed in the sector to hit 126,000.This compares with 380,000 people at the height of the boom.

It also said the value of construction output in 2009 was €18bn, which will fall to €11.7bn this year. High debt levels, difficulties securing finance, an overhang of unsold properties and "nervousness among consumers" means that fewer houses are being built.

"Reflecting the severe contraction in housebuilding in 2009 and 2010, the estimate for new housebuilding is revised downwards. . . to 8,500 units in 2010," it said.

In 1970, when records began, 13,887 new homes were built.

Although construction tender prices have fallen by an average of 27pc --and up to 35pc in some sectors -- the situation has become "untenable" for many construction companies.

Irish Independent

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