Job losses in the construction sector are accelerating as building activity contracts sharply, data released by the Central Statistics Office (CSO) today showed.
The CSO’s construction employment index, which measures the number of staff in private construction firms with five or more employees, fell 14.8 per cent to 92.6 in the year to May, the lowest reading in eight years.
This is the 14th consecutive month the index has declined.The index is based on a sample of 1,000 firms and is used to measure short-term trends.
According to quarterly data from the CSO, 274,400 people were working in construction at the end of March, down from a record high of 282,000 in first quarter of 2006.
The Construction Industry Federation (CIF)said it now expects housing completions to fall to around 45,000 this year, down from the record 90,000 units built in 2006 and the 78,000 built last year.
Speaking on RTE radio this afternoon, Tom Parlon head of the CIF said the industry was about to lose “20,000 to 30,000 jobs” and that demand had dried up due to a combination of negative sentiment and liquidity problems restricting the mortgage market.
He called for “incentives” to kick-start the market and reduce the stock of unsold houses.
“We are having discussions with the banks and Government and other players in terms of trying to bring some liquidity into the market".
“We are looking at some areas internally, for example our pension fund, which is in funds to the tune of about €20 billion. That could be made available, technically it is possible.
“Likewise we need to incentivise the people that are sitting on the fence at the moment. We have a lot of people in that house-buying age bracket with jobs who can afford the houses”, he said.
Central Bank Governor John Hurley told the Joint Committee on Finance and the Public Service earlier this week that housing investment had peaked at around 13 per cent of GDP in 2006 and was likely to fall to about 7.5 per cent of GDP this year.
The fall in construction employment has contributed to a sharp increase in the number of people claiming unemployment.
The numbers signing on the Live Register for unemployment assistance has risen by almost a third in the last 12 months, or 54,400 people , the fastest rate of increase since records began over 40 years ago.
In June, 10,100 people joined the Live Register bringing the seasonally adjusted total signing on to 217,400. As a result the estimated unemployment rate in June rose to 5.7 per cent, compared with 5.4 per cent in May.
