CIF cuts building growth forecast to 2% from 7%

The Construction Industry Federation (CIF) has cut its growth predictions for the industry from 7 per cent to 2 per cent for the current year, due to the slowdown in private construction.

The CIF has also called on the Minister for the Environment, Mr Dempsey, to remove recently imposed restrictions on the duration of planning permissions for private housing development, and restore mortgage interest relief on rented accommodation to stimulate activity in the sector.

It also wants the Government to appoint a regulator to monitor and regulate employment agencies which bring foreign labour into Ireland. It estimates that about a quarter of the 80,000 workers required between now and 2006 will come from outside the Republic.

Mr Liam Kelleher, director general of the CIF, said the Minister was "wrong" in saying that the private housing sector was responsible for the low stock of housing in the State and the industry would continue to say so because it felt so strongly about it.

"Major policy changes have taken place in the last 12 months which, in the assessment and judgment of our members and ourselves, have contributed to that slowdown in output. We can say what we think is necessary to bring volumes on the supply side back to where they were. The Minister of the day has the power to decide. We can't make him change," Mr Kelleher said yesterday after publishing the CIF's economic review and outlook in Dublin.

Private housing construction is down 20 per cent in the first five months and would be down 11 per cent to around 40,000 completions in the full year.

Mr Frank McCaffrey, president of the CIF, said that at the beginning of this year he was forecasting a 7 per cent growth in construction volumes for 2001. He now expects a 2 per cent growth rate, he said. The construction industry was now the largest sector in the Irish economy and was growing much faster than the economy as a whole. In 1995, it contributed 14 per cent to GNP; by 2000, it was contributing 20 per cent.

The CIF expects more measured growth over the next six years.