Record amount of construction sector lay-offs

A DROUGHT of new construction projects led to a record rate of layoffs in the troubled sector last month, the latest survey of building firms indicates.

The Ulster Bank construction purchasing managers' index shows that the mood among builders continues to darken, with the rate of decline in staffing levels accelerating for the fifth month in a row and higher oil prices causing a sharp increase in the cost of related building materials.

New business, employment rates and expectations for the future all plummeted in July. Increases in commercial and civil engineering activity meant the overall index rose slightly on June's record low, but at a value of 31.3, activity in the sector is still far below the 50 mark that separates growth from contraction.

The once-booming housing sector continued to drag down overall construction activity.

Ulster Bank economist Pat McArdle said the sharp fall in employment confirmed anecdotal evidence of significant layoffs in the run-up to the builders' annual summer holidays, adding that the situation was likely to get worse before it gets better.

"The fact that new business also recorded a record low means that further falls in activity and employment are likely," said Mr McArdle.

The Central Statistics Office (CSO) publishes its construction employment index for the month of June on Friday. The latest index shows a 15 per cent year-on-year decline in construction jobs.

In more evidence of the extent of the sector's collapse, machinery auctioneers Ganly Craigie said yesterday that the amount of construction equipment being auctioned off has more than doubled in the last six months, as builders hit by the recession are forced to close.

Ganly Craigie owner Robert Craigie said its intake of construction machinery has jumped 125 per cent, attributing around 70 per cent of the increase to bank repossessions of assets from collapsed firms.

Ganly Craigie, based in Naas, Co Kildare, usually holds auctions every six weeks selling off machinery, ranging from tractors to mini-diggers and excavators.

But while Irish builders are folding, Mr Craigie said auctioneers are not having any problem shifting the equipment primarily because of the rising market in eastern Europe. "The last auction we had there were about 800 people down at it which is about twice the norm," he said.

"There is a huge export market to eastern Europe, which wasn't there the year before. Poland has come on stream, Russia has come on stream, Romania, Latvia, Lithuania. It's going out as fast as it's coming in."

- (Additional reporting: PA)