EMPLOYMENT IN the construction industry continues to tumble as the number of new homes being built drops sharply, according to new estimates by the Central Statistics Office (CSO). Laura Slatteryand Ronan McGreevyreport.
The index of employment in construction, which analyses job levels in private construction firms with five or more employees, contracted further in February and is down 11.1 per cent on February 2007. This marks an acceleration on the 10 per cent year-on-year drop recorded in January.
The monthly employment index is at a five-year low, with more job losses in the sector expected.
A spokesman for the Construction Industry Federation (CIF) said some housing workers were finding employment in the repair, maintenance and improvement sector, which is estimated to have a value of €7 billion.
Homeowners deciding to renovate their existing properties rather than buy new ones in the uncertain housing market, as well as work to improve the energy efficiency of buildings, was creating jobs for construction workers who had been laid off from new development sites.
"However, that sector will not take up the shortfall in employment in its entirety," the CIF spokesman said.
The number of new housing units registered in the first three months of 2008 has plunged 67 per cent compared with the same period last year. Some 45,000-50,000 new homes are expected to be built this year, compared to 78,000 in 2007 and a peak of 93,400 in 2006.
The Minister for Finance and taoiseach-designate, Brian Cowen, yesterday blamed an oversupply of housing for the slump in construction employment.
Mr Cowen said the oversupply happened during the record years of housing growth in 2006 and 2007, and that the number of houses expected to be built this year represented a more sustainable level of housing construction.
"That oversupply is now feeding through the system. Vis-a-vis last year, 2008 is seeing less activity and that is having an effect on employment figures because of its relative labour intensity as an industry," he said.
He added that work on the National Development Plan would take up some of the slack, with €8 billion being spent this year on capital investment projects.
Mr Cowen described falling house prices as a correction in the market which was "necessary" and which was improving affordability for first-time buyers.
He warned that it was wrong to "talk ourselves down into a depression or a recessionary cycle", which he said was not appropriate because the economy was still performing strongly.
But Alan McQuaid, economist at stockbroking firm Bloxham, said a further deterioration in construction employment was on the cards in the coming months, while the construction purchasing managers' index, to be published on Monday, would show a further contraction in activity.
Some 150,000 housing industry workers face an uncertain future, according to Fine Gael labour affairs spokesman Damien English. The skills of some 30,000 construction industry apprentices were being superseded as the Irish economy weaned itself away from the building boom, he said.
Mr English reiterated Fine Gael's call for a national skills and training system.
"There is still no national strategy to ensure a successful shift from construction to knowledge and service industries," he said.
