The Construction Industry Federation has rejected a claim by the Economic and Social Research Institute (ESRI) that the industry would not be capable to deliver on the next National Development Plan.
The ESRI has claimed the Government had obtained smaller-than-expected economic returns from the previous plan. According to an ESRI study published last month, the construction industry does not have the capacity to cope with the number of projects being promised.
However, in a statement released today, the CIF said it was "confident in the capacity of the construction industry to continue to meet the needs of a growing economy".
It called for further investment to ensure continued development "and help to remove existing bottlenecks that exist in our infrastructure".
Commenting on the ESRI claims, Mr. T.J Walsh, president of the Master Builders' and Contractors' Association, stated: "The present NDP has brought huge benefit in terms of building a proper infrastructure, but the growth in the economy has been so great, that in many cases, need has run ahead of the investment put in place.
"The CIF believe it would be counterproductive to talk about reducing the spend for the next NDP."
Speaking on RTÉ Radio this morning, Edgar Morgenroth of ESRI said that spending should be increased more slowly to ensure that the State got value for money.
"If the right measures were taken in the budget then some pressure could be taken off the construction sector through reducing private demand - perhaps by getting rid of some of the tax-breaks for investors," said Mr Morgenroth.
"It's very clear that there are very many areas where investment is absolutely required- public transport etc. The problem is we don't have the capacity in the economy to build all those new structures so in that context we were recommending a somewhat more modest NDP."
He said that even the relatively small increase in investment over and above the ESRI's recommendation could have long-term repercussions. "There might be a free lunch today but we might be suffering tomorrow that is the problem," said Mr Morgenroth.
ESRI economist Prof John FitzGerald warned last month the economy was not ready for significant increases in capital spending and recommended that spending in the next plan should be cut to €8.4 billion from the €10 billion the Government intends to spend per year over the next plan, due to run from 2007 to 2013.