by Barry O'Hanlon in today's Irish Times
Almost 150,000 jobs in construction lost since 2007, says study
CLOSE TO 150,000 builders have lost their jobs since the construction industry went into recession in 2007, according to Government figures released yesterday.
The Department of the Environmentâ€™s Construction Industry Review and Outlook states that the recession in the sector is deepening, and predicts that the sector will contract to its mid-1990s level by the end of 2011.
The report, written by Annette Hughes of DKM Economic Consultants, estimates that direct employment in the industry fell to 167,000 by the end of August, implying that 107,000 jobs were lost since 2007.
â€œIncluding an estimate for indirect employment, the total number employed was 233,800 at the end of August â€“ a reduction of 147,000 jobs since the peak,â€ the report adds.
The value of the industry last year fell by â‚¬6.4 billion to â‚¬32 billion, a decline of 16.5 per cent.
The report predicts that it will fall to â‚¬20 billion this year, a decline of nearly 33 per cent on 2008.
As the economy is unlikely to begin growing again for two years, the building industryâ€™s value is set to fall to â‚¬13 billion in 2011, the report says.
At that stage, it will account for 10 per cent of the wealth generated in the Republic that year, compared with 25 per cent in 2006.
In volume terms, the industryâ€™s output â€“ what it builds â€“ will have halved since 2006, reducing its scale to that of the mid-1990s, the report says.
It warns that there are risks that the industryâ€™s value could fall even further over the next two years. If public spending on infrastructure were to be cut by â‚¬13.3 billion over the 2009 to 2011 period, construction output could drop to â‚¬11.7 billion, less than one-third of its peak in 2007.
Added to that, further falls in house prices would hit residential building, forcing output closer to â‚¬10 billion.
The report states that measures are urgently required to sustain investment in the industry. â€œThe Minister for Finance, in his budget speech, indicated that there is scope to explore alternative options for funding public infrastructure,â€ it says.
â€œWith the industry already heading for its most severe contraction in 30 years, such initiatives need to be urgently brought forward to protect jobs, retain the skills base and provide much-needed infrastructure.â€
The report adds that, given the spare capacity in the industry, there is a good argument for incentives to boost energy efficiency in existing buildings.