Building sector ‘will lose 55,000 jobs in 2009’

THE Construction Industry Federation claims 55,000 jobs will be lost within six months unless Government reinvigorates capital infrastructure plans and banks start issuing mortgages.

The CIF said construction was probably the only sector at present that can create jobs and contribute in terms of Government revenues.

“If you take the unsold units on the housing market there is €1 billion tied up in VAT,” said CIF director Martin Whelan.

“Some form of incentive would create an immediate return to the state. You can imagine the contribution that would make in the current environment. In terms of infrastructure, if you look what has been done in America or Britain, the key is to invest in infrastructure to save jobs.

“We know the multiplier effect from capital spending is greater than any other form of spending and in terms of securing jobs it has the biggest contribution to make. We are saying to Government that not only should in not just cut back on infrastructure it needs to reinstate the projects it has already cut.”

Mr Whelan said employment in construction had fallen from a high of 280,000 in the third quarter of 2007 to 190,000 now.

“In the absence of measures you are looking at another 50,000 to 55,000 jobs lost this year and basically over the next five to six months. We are not saying we ever going to return to the days of building 90,000 houses. But we do have a young population, yet people have postponed buying houses because there have been issues with the banks.

“We have met with the banks and they are eager to launch new campaigns to attract first time buyers. Some form of incentive would free up the €1bn that is tied up in VAT. We estimate 30,000 people have postponed a purchase. A lot are in safe jobs and want to move on but can’t because the banks won’t lend.”

A reinvigoration of capital infrastructure programme was essential to returning money to Exchequer coffers and creating employment.

“Every €200m spent will give an immediate return to the state of €140m in terms of social welfare savings, in terms of the multiplier effect and income tax.”

“There is stalling of capital infrastructure across the state. The Minister for Education recently said he was going to re-tender a load of school projects even though they are ready to go because he feels he can make another 15% or 20% saving... People’s jobs were depending on those projects going ahead now, yet he is out heralding this.”