Annual dinner: Society of Chartered Surveyors: The Celtic Tiger is back, or if not the tiger, perhaps the Celtic Panther. A leading economist argues we are experiencing a "golden age of construction", a boom time that has continued despite a slowdown in the world economy.

"It is a bit of a downer to see the roads dug up," admits Bank of Ireland's chief economist, Dr Dan McLaughlin. "But I think some times we lose sight of the fact that it is a golden age of construction."

Dr McLaughlin addressed last Thursday's Society of Chartered Surveyors annual dinner. The president of the society, Joseph Bannon, who also addressed the dinner, called for the Government to reduce stamp duty to slow the outflow of investment capital abroad.

Speaking afterwards Dr McLaughlin remained very upbeat about prospects both for the construction industry here and the economy in general.

"We can't grow at the 10 per cent to 12 per cent per annum of the past few years but our potential growth rate is still 6 per cent," he told The Irish Times. "That is tiger enough, or maybe panther," he added with a laugh.

"Because of the Celtic Tiger years our income per head is one of the highest in Europe," he stated. It may not seem so, however, because our infrastructure has had to play catch-up. "The point is we are actually building it."

The statistics more than back this contention up, he believes. The construction industry now employs 200,000, more than double the numbers employed in 1995.

The volume of construction output doubled between 1995 and 2002, with the value of road building up a staggering 159 per cent and dwellings up more than 90 per cent.

Construction output had slowed in the recent past but still achieved 4 per cent growth during 2003, driven by a 12 per cent rise in the output of homes. He believes, however, that our performance in house building - including homes and apartments - has been "astounding and unprecedented".

More than 65,000 units were completed during 2003. In the UK 175,000 units were completed. "There is no country in western Europe which has seen anything like the growth in housing that Ireland has seen," he declared. "I find it amazing that nobody wants to take any credit for this."

The 2003 performance represented a threefold increase in the output from a decade earlier. Housing stock was now growing by more than 4.5 per cent per year, Dr McLaughlin said, "a remarkable figure in an international context". These figures were a challenge to those who argued that there was evidence of market failure in the Irish housing market, he added.

"The Government has lost its nerve a bit about housing," he said. "Despite what is an extended supply by any standard, there is still a perception there aren't enough houses being built."

Other economic indicators also point to an ongoing tiger or even panther economy. Unemployment figures out last Friday indicated a 4.7 per cent rate, he said, effectively full employment. These hadn't varied in a significant way over the past few years "and we are giving out 50,000 work permits to non-nationals. That shows the labour market hasn't weakened."

The global economy has struggled over the past few years but has rebounded and growth is coming back, he added.

His message to the chartered surveyors was straightforward: "The golden age is not yet over." He believed that housing demand would be sustained by a full employment economy, and that a recovery in business investment this year would ultimately boost private non-residential construction.

Public sector investment in infrastructure was also likely to grow steadily into the medium term, leading Dr McLaughlin to suggest that Irish growth should be close to its potential of 6 per cent over the next 18 months.

The strong outflow of investment capital, particularly to the UK, was being caused by the high cost of investing here, according to the society's president, Joseph Bannon. He highlighted the "exorbitant" stamp duty as a key cause of the outflow.

"Whilst some of the haemorrhage of capital to the UK is the result of lack of suitable investment product in Ireland, it is also significantly influenced by the high cost of investment in this country, particularly with the 9 per cent stamp duty," he said at the dinner last Thursday.

"The society has made representations to Government on this matter but, as you will be well aware, the Minister for Finance has not taken any notice. Greater transfer of commercial property ownership would take place if stamp duty was restored to the 6 per cent level and we should continue to press for this."

Investment in the UK far outstripped investment at home, he said. "It was in the region of €2 billion and projections for 2004 indicate that this figure will be more this year."