EMPLOYMENT in construction has halved since the industry’s peak in 2007 and will drop by a further 40,000 this year alone, experts have predicted.
The number of people currently employed in construction stands at 130,000. In 2007 that figure was 260,000.
Davis Langdon PKS (DLPKS), a construction consultancy firm, predicts that the construction industry will see a decline of about 23% in 2010.
In its annual review, DLPKS predicts up to 40,000 more jobs will be lost before the end of the year in the sector.
“From a high of €38 billion in 2007, the construction industry is predicted to have reduced to the region of €19bn in 2009 – a reduction of approximately 50%. DLPKS predicts this will fall further to €14bn in 2010,” it said.
The Construction Industry Federation (CIF) said even that figure was optimistic. It believes the value of output in the construction industry is set to fall to €12bn this year and to below €10bn in 2011.
“The industry is, by European standards, falling significantly below its medium- and long-run equilibrium level, which has serious implications now in terms of job losses and in the future when the state comes to address Ireland’s wide ranging infrastructure deficits, as it inevitably will have to,” said Martin Whelan, CIF’s director of research and policy.
“The recent flooding throughout the country is a case in point in terms of the need for investment in our infrastructure but our problems extend into practically all areas of public life, including education, health, transportation, telecommunications and broadband, and in terms of waste management and environment facilities.
“The cost to the state in the immediate term is huge in terms of job losses – a site-based construction worker who loses his or her job goes from paying, on average, €17,000-18,000 in taxes on their income to receiving €18,000 from the state in unemployment assistance. The spending of construction wages in the wider economy also dries up.
“Either economically or socially, this makes no sense and the state should avail of what is a unique opportunity to provide for the infrastructure needs of the country, at excellent value for money for the taxpayer, and in a way that would help support Ireland’s economic recovery.”
The DLPKS review also found there had been a 16% reduction in tender prices in 2009 with a 6% decline expected this year.
“The cumulative impact of the reductions over the last three years is that Ireland has reverted to tender prices last seen in the late 1990s,” it said.
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