Davy's Construction Jobs Warning -But Ireland still to be one of the Top EU Economies

In a report on the Irish economy, Davy Stockbrokers says that 35,000 jobs will be lost in the construction sector by the end of 2008. However, it also says the losses will be offset by 15,000 new jobs in building of infrastructure and commercial property developments and it predicts economic growth will remain strong.Davy Stockbrokers reiterated the belief that the housing sector is on the brink of an adjustment, with the number of housing completions likely to fall in the second half of the year. The report says that the number of completions will fall off by 17 per cent in the second half of 2007. But it stressed that a forecast of 80,000 house completions for this year and 65,000 next year is still a soft landing.
Although there will be some redeployment of labour to other parts of the construction industry, it is "inevitable" that there will be job losses, Davy economist Robbie Kelleher said.The numbers of workers employed in housing will fall from around 185,000 to 150,000 by the end of 2008, he said. However, this will be partially offset by increased activity in other sectors of the construction industry, where Davy estimates an additional 17,000 people will be employed over the same period.That would leave a net job loss of around 17,000, or six per cent, between now and the end of 2008.
With around 13 per cent of the construction workforce made up of foreign nationals, who are considered more mobile than other construction workers, a portion of this group may relocate to Britain.Increased levels of public sector construction under the National Development Plan, a buoyant commercial sector and a surge in home improvement will help counterbalance the downturn in housing, they say. As liquidity and affordability in the second-hand house market deteriorate, there is likely to be increased spending on home improvement, particularly given the financial resources available from SSIA accounts.The commercial, infrastructure and home improvement sectors account for up to 40 per cent of construction investment. However, Davy expects that employment in the construction sector as a whole will be falling at a year-on-year rate of six per cent by the end of 2008.Overall job creation in the economy is likely to slow to one per cent by the end of 2008, which is the equivalent of 20,000 jobs. This is down from a figure of 80,000 in the 12-month period to the end of February 2007. The February figures from the CSO showed an increase of over 28,300 new employees joining the construction industry in the previous 12 months.
The stockbroker’s report concluded by saying there are increasing signs that export growth will be stronger in the future than it has been in recent years. Davy sees GNP growing by 4.5 per cent this year and three per cent next year. Employment growth is likely to slow to one per cent by the end of 2008.