THE demise of the Celtic Tiger economy is being felt most severely in the construction industry, the sector which benefited most from the boom years.Banks are closing in on property developers facing financial difficulty because they cannot sell new homes, and employers want a 12-month pay freeze for building workers with a 30% cut in the minimum wage for new entrants to the industry.Although union leaders said they will strenuously resist any attempt to introduce a pay freeze, the Construction Industry Federation has produced for National Pay Agreement talks a specially-commissioned report from experts that detailed a list of threats to continued progress in the building sector.Spiraling oil prices, the increased cost of building materials, rising labor costs and a fall-off in the value of construction contracts were all cited in the report as posing a threat to the future competitiveness of Ireland's construction industry.The cost of labor was given special attention in the analysis, with hourly rates having doubled in the 10 years to 2007.It was also pointed out that the 2006 hourly rate of $26.38 for Irish craft workers was way ahead of the $20.90 earned by their German equivalents and $22.20 in Spain.Construction Industry Federation chief Tom Parlon said his wage cuts demand is designed to "bring the industry's costs back in line with the broader economy and with costs in other European countries."The banks' moves to protect loans totaling almost $160 billion include sending in their own "troubleshooters" to take over the running of some construction firms which are under pressure.One leading economist said, "A lot of developers around the country cannot develop at the moment because they cannot sell the product. A lot of them are under serious financial stress."Opposition politicians squarely laid the blame for the construction downturn on Finance Minister Brian Cowen's handling of the economy.Fine Gael Finance spokesman Richard Bruton said Cowen should have predicted the downturn and protected workers accordingly."With new housing output collapsing and the annual increase in residential mortgages at its lowest level for 14 years, Mr. Cowen must now explain how he made such a shambles of his stewardship of the housing market and what he now intends to do," Bruton said.Labor Party Finance spokesperson Joan Burton said construction workers were going to be punished due to mismanagement of the industry by the government.