A CONTINUED plunge in house building will keep the Republic's construction industry at the bottom of the European league next year, experts have warned.
About €8 billion was wiped off the value of the building industry to the economy this year, according to figures produced by economists Annette Hughes and John Lawlor of DKM Consultants, which produces regular reports on the sector for the Government.
They pointed out that, at its peak in 2007, the sector generated €38.5 billion, but its output this year is likely to be in the region of €30.5 billion.
The 20 per cent-plus fall in the industry's value is worse than the 17.7 per cent that Ms Hughes predicted in June. At that time, it was expected that the fall in building activity would cost the economy about €6.5 billion.
Ms Hughes and Mr Lawlor said yesterday that the European building industry will not recover until 2011 and warned that construction in the Republic and in Spain will show the biggest contraction in 2009.
A fall of 42 per cent in house building in the Republic is likely to be the main contributor to the continued slump in the industry.
"Overall output in the Irish construction sector is projected to decline by almost 13 per cent over the period 2008-11 or by 4.3 per cent per annum on average," they said.
At the same time, the Government's budget pledge to spend €8.74 billion on key infrastructure projects next year is likely to be the only source of new building activity in 2009.
DKM is the Irish member of Euroconstruct, an alliance of construction economists from 19 western, central and eastern Europe countries.
Ms Hughes pointed out that the outlook for the industry across the Continent has worsened over the last six months "with the result that the recovery, which was expected in 2010 in the June forecast, is now delayed until 2011".
Euroconstruct's most recent conference heard that the industry is expected to shrink by 4.3 per cent across Europe next year. The organisation expects the sector to stabilise in 2010 and grow by an estimated 2.2 per cent the year after.
The industry will only grow in four eastern European countries next year - the Czech Republic, Hungary, Poland and the Slovak Republic.
