EMPLOYMENT IN the construction sector continues to fall and building company failures have risen this year, as new house and apartment building declines sharply, new data shows.
The construction employment index, which analyses the number of staff in private construction firms with five or more employees, contracted further in April to 94 and is down 13.8 per cent on April 2007, according to data from the Central Statistics Office.
This marks an acceleration on the 12.4 per cent year-on-year drop recorded in March. The monthly index is at a five-year low and was last at 94 or less in November 2003. The base year for the index is 2000, when the index recorded a reading of 100.
About 25 companies in the construction sector have gone into liquidation every month this year, according to figures from business information company, Experian.
The company said that if this continued, construction-related failures for the first six months would amount to 55 per cent of all business failures for 2007.
There have been 184 company failures across all sectors this year, compared with 127 for the first half of 2007. The number of receivers appointed to companies has risen to 21 so far this year, from four in the first half of 2007.
Liam Reddy, director of Experian, said he expected construction-related failures to "taper off" in the second half of this year.
"Companies would have limped along for some time and worked their way out, but now with the ODCE (Office of the Director of Corporate Enforcement) when they are in trouble and directors see their company is insolvent, they react quickly," he said.
A report from European industry group Euroconstruct forecast the European building sector would shrink in 2008 as house- building declines in western Europe. Construction in the 19 countries tracked by the group will fall 0.3 per cent this year.
The data suggests new residential building in Ireland is expected to decline by 45 per cent this year.
Overall, homebuilding in western Europe will fall 8.6 per cent this year.
