'Crisis warning" for builders as slowdown bites

The construction industry in Meath is 'in crisis' and large numbers of workers are suffering hardship as house-building in the county slows down, a trade union leader warned this week. Anton McCabe of trade union SIPTU said that the industry was 'certainly at a crossroads' and he said he was receiving daily reports of employers having to lay off staff because of the slowdown. His remarks coincided with a forecast by the Economic and Social Research Institute (ESRI) this week that the economy will experience a recession for the first time since 1983, and a return to net emigration next year. Although the house construction slowdown in Meath is not as pronounced as in other counties, it has nevertheless slipped by 27.5 per cent in the first five months of this year. In the 12 months to the end of May this year, the number of houses built has fallen by 515 (25.3 per cent) from 2,036. Other counties have fared worse, however. In the first five months of 2008, there have been steep dives in house-building activity in all counties - Louth -37.6%, Monaghan -78.4%, Cavan -76.4%, Galway -54.9%, Kildare -81.8%, Kilkenny -74.7% and Westmeath -88.3%. The Construction Industry Federation (CIF) acknowledges that, while there has been a slowdown in the industry, it has not been as pronounced as many people thought. Kevin Flavin, eastern region executive with the CIF (Meath, Louth and Monaghan) said that there had been a slowdown in the house-building sector in the first four to five months of this year. However, civil engineering projects were proceeding in line with what had been expected under the terms of the National Development Plan (NDP). In addition, many local authorities were engaging in maintenance, repairs and investment in housing, he said. This was an industry which was worth €7 billion, Mr Flavin said. Meath-based builder Tom Hora this week urged people not to write off the building industry. Commenting on reports that the number of houses built this year might drop to 40,000 (from a high of 80,000-90,000), he said that this level of activity would still keep many builders in business. 'There is never an easy time to buy a house but this is a good time for first-time buyers who want to get their foot in the market. People are going for quality, location and a good price and they will get it now that the market is levelling out,' he said. He has urged the Government to bring in a house savings scheme for young people. 'They could encourage young people to save for a deposit and then match it by way of encouragement. Certainly, I am still shifting houses in Trim, which is a good location near to Dublin and Blanchardstown,' Mr Hora added. Mr McCabe of SIPTU said his experience was that workers across the board, including indigenous and migrant employees, had been affected by the slowdown. 'There is a lot of hardship out there that people hadn"t envisaged a few months ago. A lot of people availed of the high rates of pay prevailing during the Celtic Tiger years. They moved up in the housing market or bought new cars. I"m not saying that they borrowed and spent their money flippantly, but they are finding their backs against the wall now,' he said. He added that he was getting calls from employers on a daily basis to the effect that they had no alternative but to terminate workers" employment. 'I have never experienced what is happening at the moment. It is very worrying, and very worrying for our county. How the house-building sector is going to be re-ignited, I don"t know,' said the SIPTU official. There was also a 'ricochet' effect in that service industries to construction were also badly affected by the slowdown. He said he knew of small shops or delicatessens that had thrived as a result of the building industry, but which were now beginning to be affected by the slowdown. 'There are as many building sites closed down now as are open. I can see the situation already that is going back to the 1980s where a builder will have to sell a house before he builds it. We might be seeing the end of 'spec" building. As far as I can see, it is dog eat dog out there at the moment,' Mr McCabe said.