Report: 85,000 construction jobs to be lost by 2009

AT LEAST 85,000 construction jobs will be lost by next year from the height of the building boom in 2006.

House prices could fall by up to about a half (46%) from their peak before they recover again, according to an independent report commissioned by the Department of the Environment.

The report said more than 50,000 building jobs have been shed in the past year and a further 30,000 will go by the end of 2009 bringing the numbers working in the sector to about 200,000.

The worst hit areas are the west and southwest of the country where about a tenth of building jobs have been lost in the past year.

The report, Review of the Construction Industry 2007 and Outlook 2008-2010, carried out by DKM Economic Consultants says the stock of unsold homes on the markets is at a historical all-time high.

The report says house building levels will drop to 25,000 units in 2009 from 43,000 this year. A “modest recovery” to 32,000 is expected in 2010.

“The construction industry is undergoing a period of significant slowdown. Anybody driving around the country can see it: abandoned building sites, cranes that appear frozen in the sky line, fewer for sale signs and much smaller property supplements,” it said. “Average house prices could drop by anything from 20% to 46%,” the report said. The authors say construction companies have “fared worse than other companies” and the number of insolvencies has more than doubled in the past year. The majority of these are small companies or contractors.

“Confidence levels in the sector are at an all time low as new business levels continue to weaken, the pace of unemployment loss is accelerating and companies remain pessimistic about the future outlook,” according to the document that has been presented to Environment Minister John Gormley. Tender prices for construction projects have also fallen by 8%.

“This should be a critical issue for public sector projects and should encourage more public sector investment in key infrastructure projects which earn an economic rate in return,” the report said.

A third of jobs in electrical engineering and more than a quarter of brick-laying jobs have been lost in the past year, it added.