Credit crunch forces builders to sell off machinery

The amount of construction equipment being auctioned off more than doubled in the last six months as builders hit by the economic downturn are forced to close.

Leading machinery auctioneers Ganly Craigie said its intake jumped 125% with the vast majority bank repossessions.

But while the credit crunch is crippling the construction industry in Ireland wholesalers in eastern Europe are buying up the cast-off equipment in droves.

“We started seeing an increase in the amount of stuff being taken in last October to December,” said Ganly Craigie owner Robert Craigie.

“Our figures would be up about 125% over the last six-month period.

“I’d say about 70% are repossessions. It would be bank-encouraged in a lot of cases.

“It’s the whole slow down in the building industry that is causing this.”

Ganly Craigie, based in Naas, Co Kildare, usually holds auctions every six weeks selling off machinery ranging from tractors to mini-diggers and excavators.

But while builders are folding as the once booming housing market slumps, Mr Craigie said auctioneers are not having any problem shifting the equipment primarily because of the rising market in eastern Europe.

“The last auction we had there were about 800 people down at it which is about twice the norm,” he said.

“At the moment there is a huge export market to Eastern Europe, which wasn’t there the year before. Poland has come on stream, Russia has come on stream, Romania, Latvia, Lithuania.

“It’s (the equipment) going out as fast as it’s coming in.”

Mr Craigie, who has been working as an auctioneer since the early 1970s, said the builders he has dealt with feel the domestic housing market will not bounce back for at least another 18 months.

Figures released by the Department of the Environment earlier this month reveal housing completions dropped nearly 29% in the first half of the year.

To the end of June 27,736 housing units were completed compared with 38,978 for the same period last year.