FAS says 50,000 job losses to hit construction sector

Irish Independent

16.05.2008

By Fergus Black

THOUSANDS more job losses in the construction sector were predicted last night as figures revealed the largest recorded decline in employment in the industry in 14 years.

Employment in private construction firms fell by 11.7pc in March compared to the same period last year, according to the latest employment index from the Central Statistics Office.

FAS, the training and employment authority, said the figures confirmed anecdotal evidence that the first quarter of this year was a “particularly bad one” for those working in the house-building sector.

It said this represented the largest decline since the index began in 1994.

It predicted further job losses, and forecast there would be almost 50,000 fewer jobs in construction by the end of next year than at the start of 2007, when the sector employed 286,000.

FAS said that given that men account for 95pc of all construction workers, the latest figures were consistent with the noticeable rise in males signing on the Live Register in recent months.

“Given the current overhang in housing supply in the residential sector, further declines in employment can be expected,” it said.

“We take the view that employment in construction will be almost 50,000 off its quarter one 2007 peak by the end of 2009. This will pose serious policy challenges.”

But FAS economist Brian McCormick said there had been a lot of construction activity in recent months in repair and maintenance and the infrastructural sector which accounts for the majority of public sector construction employees.

“It’s not all grim news but it requires workers to be flexible concerning re-training and how they can sustain their work but not on a building site,” he said.

The Construction Industry Federation (CIF) said house building was at its lowest level in more than a decade — down from 78,000 to around 45,000 completions this year and was expected to fall by another 5,000 next year.

However, there was an underlying demand for 55,000-60,000 new homes a year and the sooner confidence returned to the market the better.

SIPTU’s construction branch organiser Eric Fleming said the latest figures were not surprising given the “collapse” of the residential construction sector.

But he said much needed to be done to make homes more affordable for younger buyers and the Government to act by tackling the cost of building land and by insuring more social and affordable homes were made available.

Confirmation of the latest downturn in construction comes as the lure of a civil service post, even a temporary one, draws thousands of job seekers.

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