The Construction Industry Federation has warned the Government that its policy to curb capital investment programmes could pose a risk to continued economic growth.

Addressing members at the federation's weekend conference in Galway, CIF president, Mr Kevin Kelly, said Government policy to cap capital investment at 5 per cent until 1999, should be revised to between 7 and 8 per cent to more closely reflect Ireland's rapid economic growth. "Since growth in capital investment must precede or at least accompany growth in the economy, it is difficult to visualise a situation in 1998 and 1999, where public investment will be capped at 5 per cent." Mr Kelly said this was a "mistaken" policy and urged the Government to re-think its strategy as a matter of urgency.

"A growing economy needs to invest for the future. We are now definitely in the fast lane and all the challenges facing us relate, in one way or another, to how we intend to live life in that lane and more especially how we intend to stay in it".