'Black Friday' could see axe fall on 10,000 workers
THE Department of Finance is bracing itself for up to 10,000 job losses in the construction sector at the end of the month.
An anticipated 'Black Friday' before the traditional builders' holiday later this month could see the largest number ever thrown onto the dole in a single day.
Construction employment has dropped by 2.5pc, or 7,000 jobs, in the last year. But industry sources say the vast majority of firms held onto staff in 2007 in anticipation of a pick-up in demand in 2008 that never materialised.
Faced with zero demand for new houses, tightening bank credit and increased interest rates, many within the sector are privately predicting a major shedding of staff.
Many due to go on holidays will be told not to report back afterwards, with cash-strapped firms already pressing for greater casualisation of their industry.
"I don't know whether it will be 5,000 or 10,000," said Tom Parlon, the director general of the Construction Industry Federation, who said he remained optimistic about the situation overall. The biggest concern of his members was to hold onto their core workforces, he said.
"It is difficult. The advice is to cut overheads, and that means jobs."
The CIF is already pressing at the national pay talks for a reduction in the hourly pay of unskilled staff that would facilitate the slimming of core employment by major builders.
There are now 275,000 working in construction compared with 282,000 a year ago, but levels of business suggest a fall to about 250,000 would be more in tune with market conditions.
A large-scale redundancy wave at the end of this month would not show up in official statistics until September, since the live register is compiled a month in arrears. But it would hit the Exchequer hard in terms of lost taxes and increased social welfare outlay.
"Obviously, the holidays is an issue that comes around every year," Mr Parlon, the former PD minister of state, declared. "But in general, firms will only lay people off if the particular job is finished.
"The big contractors all have substantial work in hand."
But he admitted the pinch was being felt among smaller firms, particularly house builders, who were facing difficulties in getting working capital. "There are turnover and cash-flow difficulties," he said.
Mr Parlon also conceded that employers were worried about losing key staff through expertise being drawn abroad in a brain drain. The CIF is pressing for the Government to intervene through such measures as a National School building programme.
The CIF is currently attempting to overthrow the Registered Employment Agreement (REA), which provides for a rate of €14.88 per hour for unskilled workers on building sites.
The big building firms say this equates to €35,000 a year, more than a newly qualified garda's starting salary, or that of a young civil service solicitor.
The federation is seeking an hourly rate of just €10.80, a reduction of €4 an hour, saying this would amount to 60pc of the skilled rate -- whereas the current stipend is 80pc of the latter.