Construction Industry on a Downer

A QUARTER of all construction workers in Ireland will lose their jobs by the end of next year, a new report has revealed.Detailed statistics in the report by FAS, the government's employment and training authority, underline a report in the Irish Voice two weeks ago that the bubble has well and truly burst in the construction industry.Other figures this week on rising food and oil prices and increasing mortgage costs hint at a deterioration in the Irish economy that is plummeting towards crisis level.The FAS report predicts that 76,000 workers who were employed in housing construction at the end of 2006 will have lost their jobs by the end of next year. With 21,000 jobs likely to be created in other parts of the industry, there will be a net job loss of 55,000.John McGrath, author of the report said, "We're looking at an awful hemorrhage of jobs in the housing sector, and both this year and next year will be tough."He said the impact of the slump will vary hugely across different trades and sub-sectors of the industry, with traditional "wet" trades such as block-laying, bricklaying and plastering, as well as carpentry, being worst affected.McGrath offered hope for some workers when he said that electricians will be less-affected by the downturn, and new opportunities will be created for specialist new skills in spot welding and steel fixing.The downturn has already bitten so deeply that thousands of immigrants -- who make up 14% of the construction industry workforce -- have already returned to their home countries, mainly in Eastern Europe.Their plight was recently illustrated in a Donegal court when a young Polish couple, carrying their infant of a few months in a small cradle, told the judge they couldn't return to have their motoring case dealt with the following week because they were going home, their dream of a new life in Ireland shattered."There just isn't any work here any more," the young man told the judge.Recruitment of construction apprentices fell 30% last year and is falling even faster this year. Just 590 apprentices were taken on in the first four months of this year, compared to 1,282 in the same period last year and 1,538 in 2006.SIPTU, the biggest trade union in the country, has urged the government to intervene to halt the decline in employment in the construction sector.The union's national organizer for the industry, Eric Fleming, said, "The government has no choice but to act now if it is to avert what will be a devastating blow not just to construction but to the wider economy."The Irish Independent editorialized, "All the indications are of difficult times ahead in the commercial property sector, with higher risks for builders and banks. This year, the grim reality of the international credit crisis will be borne in on us all. Nowhere will it be felt more sharply than in employment."For consumers, soaring oil prices, increasing mortgage costs and fears over job security have driven confidence in the economy to its lowest level in 12 years.An index of consumer sentiment published earlier this week showed its lowest reading since the index began in 1996.Food prices increased an average of more than 8% in the past year, double the rate of inflation. The issue of spiraling food prices is on the agenda at an EU leaders' summit in Brussels scheduled for later this month.Leading economic expert Austin Hughes said the most worrying aspect was the "sharp deterioration in consumers' assessment of their personal finances." He noted people were becoming increasingly "panicked" about their household finances.In recent weeks oil prices increased from $112 to about $130 a barrel with the prospect of $200-a-barrell in the next year "a serious possibility," the index report said.In the mortgage sector, a number of lenders increased interest rates charged to customers in the last month to offset the ongoing high wholesale cost of money for banks.Hughes said that this, coupled with the fact that higher inflation across the euro-zone has all but removed any hope for a cut in interest rates by the Central Bank, "has completed a particularly unpleasant set of circumstances."

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