About 20,000 building workers face the loss of their jobs over the next two years as construction output dips for the first time since the early 1990s, according to a Government-commissioned review published yesterday.
The Department of the Environment's Review of the Construction Industry 2006 and Outlook for 2007-2009predicts that house building will continue to decline over the next two years.
Overall construction output is set to fall by 1.5 per cent this year, according to the review, carried out by DKM Economic Consultants.
This would be the first decline in the sector in 14 years.
As a result of this, the review states, the number of people working in the industry could drop from 280,000 in the first half of this year to 260,000 by the end of 2009.
"The projected reduction in house building could potentially reduce direct employment in house building by around 30,000," the review predicts.
"However, the actual reduction in employment could be less if some unemployed house building workers transfer to the non-residential and repair, maintenance and improvement sectors of the industry.
"As such, construction employment could decline to 273,000 by the fourth quarter of 2007, with a further reduction to around 260,000 persons from current levels by the fourth quarter of 2009.
"This represents a net reduction of around 20,000 persons over the two years. There are also likely to be indirect job losses in the businesses and services supplying the house building industry."
The document says that employment in the industry peaked earlier this year, and reached a turning at the end of the second quarter, when employment declined by half a per cent.
But it foresees the industry stabilising in 2009 as house building activity stops falling and big infrastructure projects begin to come on stream.
The review says that the number of new homes built in the Republic last year came to 88,219.
This was the highest ever in the State's history, but was just 2.4 per cent ahead of the number reached in 2005.
The document points out that the Republic's economy relies heavily on the building industry.
Last year, the sector's output reached €35.5 billion, meaning it was responsible for €1 in every €4 generated by the economy as a whole.
House building accounted for €19.5 billion of that, €9 billion came from big public and privately funded non-residential projects and €7 billion was generated in repair, maintenance and improvement of housing.
This year, DKM says that the building industry's output will grow to €36.2 billion, an increase of 2.1 per cent.
The economists say that if construction price inflation is stripped out of that, the figure will represent an actual decline of around 1.5 per cent.
