The drop in output by the Irish construction industry will account for 16pc of the anticipated slowdown in the Western European construction sector next year, a new report showed yesterday.
Euroconstruct, an organisation which spans 19 European countries, is forecasting that construction activity will contract by 1pc in Western Europe next year, with Central and Eastern European countries taking up much of the slack.
Euroconstruct's representative in Ireland, Annette Hughes of economic consultants DKM, said that while Ireland accounted for just 2.5pc of the total European market in house construction, it would be responsible for a much bigger slice of the projected slowdown in that market.
With housing output here expected to slow from an expected 77,000 completions in 2007 to an estimated 60,000 in 2008, our share of the slowdown in Western European housing output will be a whopping 16pc.
In total Ireland accounts for construction output of €35bn a year, against a total European market which is worth €1,228bn. In terms of house completions our 77,000 units this year makes up 2.4pc of Europe's 2.3 million units.
While Euroconstruct point to a decline in western Europe, the central and eastern European countries will continue to enjoy healthy growth in output, with Poland among the best performers.
Euroconstruct said that the construction sector in Western Europe has already cooled down markedly, and growth rates have halved in the past year.
"In 2008, real construction output is now forecast to increase by just 1pc. The global crisis in the financial markets has resulted in a more cautious approach to investment in Western Europe.
"In addition to this, the downturn in the high price of real estate -- particularly in Spain, Great Britain and Ireland -- is putting the brake on demand for construction investment," it said.
It goes on to state that in Central Eastern Europe, unlike Western Europe, the construction upswing is set to strengthen over the forecasting period. Following increases in real construction volume of 7.7pc in 2006 and 7.6pc this year, the construction sector will again expand vigorously by 9.2pc in 2008 and this growth will only weaken slightly to 7.6pc by 2010, it predicted.
"Poland is exhibiting the greatest dynamism, with double-digit rates of growth. The construction sector in Slovakia is expected to grow more slowly, and the crisis in the Hungarian construction sector should be overcome in 2007.
Growth in the Czech Republic is only likely to accelerate again to some extent towards the end of the forecast period," Euroconstruct stated.