A record number of new houses will be built this year in a better-than-expected 12 months for the construction industry, it was predicted yesterday. Chris Dooley, Industry and Employment Correspondent, reports.
In its mid-term review and outlook, the Construction Industry Federation (CIF) said €200 million worth of work would be lost to the sector this year, because of a 1 per cent decline in activity.
Nevertheless, prospects for the industry were better than they looked last January.
More than 60,000 new houses would be built, an increase on the 57,700 units completed in 2002, when housing activity was "exceptionally high", it said.
Numbers working in the industry had also remained stable at 180,000, despite the economic slowdown.
Mr Matt Gallagher, chairman of the Irish Home Builders' Association, which is attached to the CIF, said this year would see a peak in housing output.
Supply and demand of private housing was "nearing equilibrium" and there would be a gradual decline in the number built over the next few years.
While the price of houses in general continued to rise, the CIF said the rate of increase for new homes was moderating. New house prices fell in June by 1.3 per cent, according to the survey published on Tuesday by Permanent TSB and the Economic and Social Research Institute.
While demand for houses continues to strengthen, other areas of the construction industry are faring less well.
Mr Liam Kelleher, director general of the CIF, said the office, industrial and hotel sectors continued to decline, and private sector investment in non-residential projects was back to 1997 levels. He said growth of 1 per cent to 2 per cent was expected in civil engineering, largely due to major projects such as the Dublin Port tunnel and Luas.
A concern facing the industry was how to maintain the capacity created to cater for such major projects, he said.
The CIF also used its mid-term review to call for a new seven-year schedule for road projects initially due to be completed by 2006 under the National Development Plan. There was now no possibility of this goal being met, it said, and a "more realistic" target of 2010 should be set.
Mr Don O'Sullivan, the federation's director of main contracting, said it was "probably never on" that the targets set out in the NDP would be achieved.
The projected cost of the projects, which include motorways linking Dublin with other cities, had also been hugely underestimated, he said. The National Roads Authority has revised the original cost estimate of €5.8 billion, at 1999 prices, to €16 billion at 2002 prices.
Mr O'Sullivan said the current mid-term review of the NDP should identify priority road projects for the remaining three years of the plan, to be undertaken before the end of 2006.
Value of overall construction output this year is expected to be €21 billion, the CIF said. This is equivalent to 15 per cent of GDP.