Boom and bloom in building

Activity in the construction industry has long since been used as a barometer for the performance of the economy as a whole. At present, the construction industry is a hive of activity with total output this year amounting to £7 billion, or 17 per cent of the total economy. Consequently, employment in the industry has grown from 70,500 in 1993 to this year's figure of 96,700 and State training agency FAS currently has a record number of construction worker apprentices going through its system.

According to George Hennessy, director of economic affairs with the Construction Industry Federation, this recovery is in line with that of the wider economy. "Throughout the 1980s, the industry suffered enormously from recession, and while a recovery was staged in 1989/'90, there was further decline in employment until 1993. It is since that year that the jobs figures have started growing again."

Of the various subsectors that make up the greater construction industry, housebuilding is particularly buoyant, he says. This year's 37,000 new house completions was a record in the history of the State. Activity at this hectic rate, however, is most likely peaking, believes Hennessy, making further gains in 1998 "unlikely".

The general contracting sector, which includes all non-residential building such as industrial, commercial or retail projects, is also responding well to the strong growth of the economy, he says. "As the economy grows, the investment needs of the economy rise sharply and the construction industry is called upon to deliver the necessary infrastructure." For this reason he predicts continued growth in this sector for 1998.

Civil engineering refers to major projects, such as roads, bridges or sanitary services. So far it has been the sector of the construction industry showing least activity in terms of both growth and employment levels. All this, however, should change in 1998. "This sector has been the slowest to show recovery in recent years, despite the influx of EU funds," says Mr Hennessy. "However its slowness is really a reflection of the long lead times you expect with major projects." Such lead times are generally made up of preparatory work in ancillary services, such as design or planning.

"Now that we are in the final years of EU structural funds," says Hennessy, "I would expect that many major projects will come on-stream to construction stage much more rapidly and this will give the whole sector a lift." While EU funding has played an important part in funding many civil engineering projects, it hasn't constituted a large net addition to overall spending levels, he believes. "What has really happened is that the Irish exchequer has been able to reduce its own levels of funding." Moreover, the reduction in EU structural funds expected after 1999 will not reduce the need for continued investment in this end of the construction industry. The country is still suffering major congestion in housing land and traffic provisions, he points out, both of which will need to be addressed as the economy continues to expand. "Look at the success the IDA is having at attracting US foreign direct investment, for example" he says.

"Such investment creates employment meaning that investment needs will also grow. The ESRI would argue that there has been a deficit in capital investment as a result of the recessions of the past." As the construction industry booms, so too do ancillary sectors such as building materials manufacturing, architecture and engineering, all of which should offer enhanced employment prospects in the year to come. But does the construction industry itself provide for a steady career, given its historical boom/bust cycle? "In the past there was a significant cyclical movement to the industry," agrees George Hennessy, "but that was similar to the performance of the economy as a whole. Now the industry has moved on to a different plateau. At the moment activity is strong in construction because of the very strong activity of the economy at large. In the late 1970s however, the construction industry was used to influence the performance of the economy. Money was invested in public programmes as a way of kick-starting the economy artificially. Now we are on a much firmer footing."

While he doesn't foresee the economy continuing to grow at its present speed, he feels it will "settle down to a more modest level and hopefully the boom and bust cycle will prove to be a thing of the past".

Eric Fleming, branch secretary of the construction section of SIPTU, also believes employment prospects in the industry will remain good. However, one employment issue which the union is currently anxious to address is the proliferation of "bogus self employment contracts" among workers which preclude them from making social welfare contributions or gaining holiday pay, sick pay and mortality benefit through the industry pension scheme. "We want this loophole closed so that construction workers are fully employed, pay their full taxes and get their full entitlements," he says.

Health and safety in the industry is another major concern, according to Mr Fleming. "We would like to see a situation where everyone in the industry carries a proficiency card or some form of skills certification to show they are qualified to operate cranes, work as scaffolders or whatever," he says. "We also want to see a register of building workers introduced to cut out the fly-bynights."

Ridding the industry of black economy workers, whom he says have given it a "dreadful image", is also hugely important. "There is no reason why the construction industry shouldn't be a desirable place in which to build a career," he maintains, "but to do that we need a systematic training programme where people could go in at the bottom of the ladder making the tea and work their way through a range of construction skills right up to top management."