The consensus is that the building business has reached a crossroads after a decade-long boom. But if the squeeze is here, or almost here, where is the evidence? There are few firm indications at this point that companies are shutting up shop around the country.

Statistics show that the level of insolvencies in the sector actually dropped in the first half of this year, and in fact have been stable over the last three years. Consultancy, Farrell Grant Sparks (FGS), which has a large corporate recovery and insolvency practice, regularly produces numbers showing the rate at which companies are going out of business because they cannot pay their debts. The total last year was 345: of these, 116 were in the construction/engineering category.

Strangely, while 2006 is recognised as the building game's peak - a result of the record 90,000 new houses built during the year - this was higher than the two previous years. In 2005, it was 104 and in 2004 it was 106. Given the perception of where the industry is this year, it would seem safe to assume the rate of attrition has increased again, but it has actually dropped back to its 2005 level.

In the first six months of the year, the number of building companies that have closed as a result of insolvent liquidations, High Court petitions to wind up the a business, examinerships or receiverships, was 53, compared with 71 during the same period in 2006 and 55 in 2005.

FGS partner and insolvency practitioner, Declan Taite, who compiles and analyses those figures, says the higher rate of fallout during the boom's peak was a result of increased energy and insurance costs, consolidation, and pressure on margins which resulted from increased competitiveness.

He also points out that as the sector picked up, large numbers of sole traders "migrated" from that status to limited liability companies, without the necessary resources or assets, or the skills to manage these businesses. Many of the issues Taite identifies crop up in a very recent trend towards increased insolvencies that some are noticing in the industry at the moment.

Kenneth Fennell, one of the principals of Kavanagh Fennell, another active insolvency recovery practice, says his firm is seeing a growing number of building companies going to the wall.

This phenomenon has not yet fed through into official statistics.

"Around 30 per cent of our assignments at the moment are from the sector," he says. "And we're getting an awful lot more inquiries as well. They're mainly smaller operators - you'd be talking about five to 15 workers, that kind of scale."

The companies involved are mostly sub-contractors and are involved in house building, the end of the industry that most believe is cooling quickly. What is happening is that to get work, they are pricing jobs as low as possible, with the consequence that they are undercutting themselves, and find that once they are paid, there is not enough money in the kitty to pay their debts, and thus they are insolvent.

These sub-contractors are working for main contractors, who in turn are watching their margins, and want the jobs priced as low as possible. Much of this squeeze is down to the current, or emerging, climate in the industry, Fennell says.

Along with this, he says he has encountered one or two examples of main contractors deciding not to go ahead with planned phases of ongoing housing developments, with the consequence that they do not need the various sub-contractors, who are forced out of business because their services are no longer required.

Fennell's colleague, Ciarán Kirk, who keeps a watching brief over statistics and trends, notes therefore that while the figures indicate that the rate of insolvency is stable, the numbers may not be telling the whole story.

Echoing Taite's earlier point about sole traders turning themselves into limited liability companies, he explains that some of these businesses would not have any real assets, so there's nothing to liquidate. He suggests that they simply fade away, ultimately getting struck off the companies' register, and losing their status as limited liability entities.

Further down the chain, there are a lot of individual workers who are hired as self-employed sub-contractors, and who do not employ other people, and are not limited liability entities.

Eric Fleming, head of trade union Siptu's construction branch, would be the first port of call for a large number of these individuals, or their directly-employed colleagues, should anything go wrong. He braced himself for a surge two weeks ago as the builders' holidays began, expecting to hear that a lot of workers were being told not to come back after their fortnight in the sun.

"We were waiting for a surge, but it never happened," he says. "It's possible that it could happen when they come back from their holidays, or may be into September as jobs finish."

Fleming also points out that a recent consultants' report states that between 70,000 and 80,000 workers are treated as sub-contractors, but should actually be regarded as employees.

Unlike most of its European counterparts, the Irish building industry is made up of a lot of small and medium-sized companies.

As the anecdotal evidence shows, these are the ones that will suffer in any shake out.

Hubert Fitzpatrick, the Construction Industry Federation's (CIF) director of housing, agrees that there is a likely consolidation phase coming down the tracks, and he also feels that there are vulnerable elements in the industry.

But he is sanguine enough about the future. He believes that small sub-contractors can take advantage of the growth in housing repair and maintenance, necessary because many homes date back over 30 years. Fennell says that there are indications that this is likely. "We are seeing that happen," he says.

However, he is sceptical of one widely-held view that, as infrastructure development kicks in under the new National Development Plan, this will take up much of the slack left by a slowing housing market. "How will an electrical contractor find work on a motorway project?" he asks.

Fennell believes that we will see growing evidence of the shake-out as we head towards the autumn. "There could be a lot more [ insolvencies] over the next couple of months, and it could go further up the food chain as well, and suppliers could also start to feel the pinch, it goes beyond just construction itself," he warns.

In the second of a three-part series on the construction sector, Barry O'Halloran finds there are few firm indications at this point that companies are shutting up shop around the country