ONE OF Ireland's biggest housebuilders has said that the industry, stakeholders and Government need to work together to manage the construction slowdown.
Responding to reports at the weekend that his company was in crunch talks with its banks over a €150 million debt, Michael Taggart, founder of Taggart Holdings, said yesterday they were exaggerated. "We're always talking to our bankers - that's perfectly normal."
Mr Taggart said most businesses in the sector were suffering as a result of the slowdown in housebuilding, which was one of the key drivers of Irish growth in recent years, "but this is not a time for knee-jerk reactions.
"It's up to everybody - the industry and its stakeholders, the Government - to recognise what's going on and to work together to deal with it. We need to take ownership of this, deal with it and move on."
Most estimates of the number of houses that will be built in the Republic this year stand at about 48,000, down from 70,000 last year and a record 87,000 in 2006, when the construction boom peaked. The rate at which new homes were being built here began to slow towards the end of 2006.
Recently, DKM Economic Consultants, which produces regular reports on the building industry for the Government, estimated that construction output will fall by 17 per cent this year, meaning that the industry is one of the hardest hit in Europe.
On the basis that the industry generated €37 billion last year, a 17 per cent fall means that it will create €6.5 billion less in additional wealth in 2008.
Derry-based Taggart, founded by brothers Michael and John in the 1980s, is one of the bigger players in residential building in Ireland. The company has sites in Dublin, Meath, Westmeath and Belfast, as well as operations in Britain and Europe. In 2006, it invested jointly with Goodbody Stockbrokers in development land in Belfast. Late last year, the company laid off 10 sales people from a core staff of 60. The move was a result of the falling number of house sales going through.
The reports at the weekend said the company intended to "trade out of its difficulties".
Buyers, particularly first-time buyers, are biding their time as prices are coming down and interest rates have gone up.
The credit crunch has aggravated the impact of the slowdown in the building and property markets.
