BUILDERS WARNED yesterday that the Government must stick to its commitments under the €184 billion National Development Plan (NDP).
Speaking after Minister for Finance Brian Lenihan acknowledged at a conference that the building boom has ground to a "shuddering halt", Construction Industry Federation (CIF) president Hank Fogarty argued that cutting back on infrastructure spending plans would be a retrograde step.
"The experience in Europe has been that investment in infrastructure and planning is the best way to guarantee future economic growth," he told The Irish Times.
Mr Fogarty acknowledged that the indications were that the Government does not intend to cut back on its major commitments under the NDP.
The seven-year plan calls for €183.4 billion to be spent across the board on developing the Republic's infrastructure and resources.
Mr Lenihan has already said that the plan is a Government priority. After addressing the conference yesterday, he said that spending plans were "predicated on the Budget".
Mr Lenihan opened yesterday's session of the annual European Construction Industry Federation congress, which the CIF hosted this week in Dublin Castle.
The Minister told delegates that the Irish building boom, a major driver of economic growth for most of this decade, had ground to a shuddering halt.
He pointed out that the housing boom was unsustainable and was slowing down in any case. "But it's unfortunate that that natural process of adjustment has now coincided with a credit squeeze," he added. Current estimates of the number of new homes that will be built in the Republic this year are about 35,000.
CIF director general Tom Parlon said that house building needed to return to a sustainable level, which he estimated at 50,000 new homes a year.
Mr Parlon said that house building is a big contributor to the exchequer in the form of income tax, social insurance, stamp duty and other levies. He warned that these revenues would dry up if the industry stalls.
"That's going to be the trick," he said. "To get a sustainable level of production that is going to keep people employed."
Figures released by the Central Statistics Office yesterday indicate that house building is continuing to fall. The Republic's local authorities granted planning permission for a total of 18,582 new houses and apartments in the first three months of the year. This was down almost 10 per cent on the 20,538 planning permissions granted during the same period in 2007.
However, the number of apartments that got approval was actually up at 5,281 in the first quarter of 2008, compared with 4,884 in the same period last year.
