The downturn in the construction industry continues, with the latest data showing house guarantee registrations down 35 per cent year-on-year for the first seven months of 2007, according to AIB Global Treasury's housing market bulletin for August.

The number of commencement notices declined by 22.5 per cent year-on-year in the first half of the year, the bulletin said. "This marked contraction in activity has, though, yet to be reflected in completions, which were virtually unchanged in the first six months of 2007 compared to 2006."

AIB said its best estimate was that completions would fall to 80,000 in 2007, compared with 88,200 in 2006, a decline of 9.3 per cent. "If the current trend in registrations and commencements continues, then the level of completions in 2008 will fall well below the 70,000 level that we have previously been forecasting. Indeed, there is nothing at present to suggest that sentiment towards the housing market is improving," the bulletin said. It added that the recent trend in registrations suggested that the level of completions was on course to fall to around the 62,500 level in 2008.

"In our view, the greater risk is that sentiment towards the housing market remains depressed as the autumn selling season gets under way, and that developers slow the rate of house completions even further," AIB said.