Construction employment will increase to 128,300 by 2003, up from 104,500 in 1997, presenting a major challenge for the sector, according to the report of the Expert Group on Future Skill Needs.

A series of measures from the Government and FAS are needed to deal with the increase in demand, according to the group.

In the period from 1999 to 2003, the group envisages skill shortages in the seven main craft areas within the construction industry. It states that in future the most notable shortages will be for electricians and painters. Major skills deficits are also projected for plasterers, bricklayers and plant fitters over the next five years. The other two craft areas are plumbing and carpentry.

While the report expects skills shortages to abate in the medium term, it adds that alleviating "short-run skills deficits in the industry will prove difficult due to the length of the apprenticeship training period".

Another problem is the "virtual exhaustion" of the stock of unemployed construction craft workers.

To deal with these problems it suggests a publicity campaign in Britain and Europe to attract construction workers back to the Republic.

It proposes that FAS examine the feasibility of reducing the average duration of apprenticeships for the construction trade from four to three years, while protecting the integrity of the apprenticeships. It adds that the current intake of apprentices should be sustained.

Average income tax liabilities should be reduced, it says, because many construction workers face high marginal tax rates on relatively modest incomes.

"There is a significant tax differential between the UK and Ireland, particularly for single people and as long as this exists a shortage of skilled construction workers will result," it states.