Major job losses are imminent in the building industry unless urgent action to restore confidence is taken by the Government, a leading building constructor claimed yesterday.
Mr Ged Pierse, chairman of Pierse Contracting Ltd., said the industry was in serious difficulties and was already shedding labour.
Builders he had spoken to over the past three months had said house sales were running at 15 to 20 per cent of expectations, he told the Society of Chartered Surveyors conference in Kilkenny.
In the absence of policy initiatives to address the problems, there would be "a lot of blood on the floor in the spring", he added.
Mr Pierse called for an immediate reversal of the decision to remove the deductibility of interest for tax purposes for landlords of residential units.
"One of the most significant features of the housing market in the last two years has been the disappearance of the investor-landlord," he said. "Hundreds of millions of pounds of construction activity have been lost to the UK and elsewhere, as investors realised they were being rejected in their own country".
The results of this misplaced policy had been to raise rental prices in Dublin to levels which were affordable only to higher-than-average earners, he claimed.
Emphasising the importance of the housing industry to the economy, Mr Pierse said overall construction output as a percentage of GNP rose from 15 to 20 per cent between 1996 and 2000. Within the construction industry, housing was responsible for more than 50 per cent of activity.
The construction industry continued to be seen as the barometer of the general state of the economy, he said.
In addition to other difficulties, housebuilders faced rising costs in a number of areas, including wages, health and safety and insurance.
The latest Department of Environment and Local Government estimates suggested that private house completions would be approximately 41,600 units this year, a 10 per cent decline on 2000.
"If urgent action is not taken, a further decline is inevitable in the year 2002," he said.
The president of the Society of Chartered Surveyors, Mr John Bruder, of Treasury Holdings, said the lack of housing supply was still a fundamental problem. He called on the Government to "roll back the tax changes which were designed to take the steam out of the market".
