2008Review: ARCHITECTURE & CONSTRUCTION:Many building projects came to an abrupt stop causing a swift reaction across the industry, write Emma Cullinanand Fiona Tyrrell

ARCHITECTURE

ARCHITECTS are often the first to go when a property bubble bursts but this time the recession has hit especially hard. "I have been made redundant in my time, as have most architects who are employers," says Sean Ó Laoire, president of the RIAI (Royal Institute of the Architects of Ireland) and of Murray Ó Laoire Architects which is one of many practicesthat has had to lay off staff.

While exact numbers are hard to come by, it's estimated that large architectural practices have lost 30 per cent of their work force, with some smaller firms losing up to 80 per cent of staff.

The hammer came down suddenly. when the banks lost control of their finances. Large practices, like apartment specialists O'Mahony Pike, quickly began to lay people off, some of them going 30 at a time.

Many medium-sized practices started by letting one or two people go. But what often mattered was how far along a practice was on in its projects: if they have a few that are on site then they are buffered for a while. Others - who were at the end of jobs or at the beginning of projects that were cancelled - were hit hard and there are well-known practices, with a reputation for good design, who have been cut right back to their two or three founding partners.

Other firms have tried to keep jobs by putting people on a short week. "We have put staff on three-day weeks twice, both in the 1980s and now," says Gerry Salley of Creen Salley Architects, who did this to save as many staff as possible, but found that it doesn't work well in reality. "It is a problem trying to programme work and arrange meetings when people are effectively off for four days, so unfortunately we had to come to the decision to let people go."

The practice is down to 13 staff from 21. "The downturn happened very quickly this time around. I have never experienced anything like it. Clients who were ready to go on a project said that they were not going to risk it. They had the money but did not want to spend it in case they needed it for something else."

Anecdotally, small practices that were concentrating on extensions and one-off houses have fared the best, with one prinicipal telling me that they have never been so busy, but another architect says that he feels like a lemming: "I'm really, really busy now but feel as if I am running towards the edge of a cliff."

"If the situation doesn't improve in the first quarter, things will get even worse and I see practices closing down or carrying on in name only," says John Graby, director of the RIAI . The RIAI is doing a survey to get a more accurate picture of how practices have shrunk, with the results due in a month's time. Many practices are looking at their situation on a weekly basis at the moment and will be hoping that the Government will kick off public projects when they return from the Christmas break. There are also hopes that the banks will start to lend again, to kickstart private and commercial projects.

"The banking crisis has created a new landscape and nobody knows what shape things will take," says Ó Laoire.

Recessions are part of an architect's existence, and many will experience around three or four of them in their careers, but this time the downturn has come with a multiple whammy.

One compounding factor is that both commercial and public projects have been cut. "Public sector work has almost completely stopped," says Graby. "The word being used is 'paused' ," Graby has also heard of private jobs being ready to go but held up by the lack of funding.

Whammy number two is that this is a far-reaching recession in global terms - in the past architects have not had to travel too far for work, eg, to London or Paris and, hardly too much of a hardship for a young graduate, New York.

Now those prepared to head abroad will have to set their sights on places like the Middle and Far East or the BRIC countries - Brazil, Russia, China, or India. Meanwhile, the RIAI has linked up with Enterprise Ireland and they took architects out to Dubai and Abu Dhabi last September. Another group is heading to Russia next week, while a second trip to Dubai is planned for spring.

"Irish practices are fairly advanced in terms of architecture across the globe and so they are looking at exporting themselves," says Kathryn Meghen of the RIAI who is travelling out with the architects. "Some practices are just looking to work abroad with existing Irish clients to help to fill obvious gaps in work here while other practices are looking at setting up branch offices in the Middle East or former Soviet Union countries." Jobs abroad are being advertised on websites such as www.worldarchitecturenews.com and www.siv.co.uk.

And, while the UK is in recession too, there are still some jobs to be had there. Of this year's graduates from DIT Bolton Street, a couple actually found jobs in Ireland while others went to Australia and England- but most have found some work.

And so, once again, we are exporting our achitects. "The real tragedy here is the generational loss of skills," says Ó Laoire¨.

CONSTRUCTION

THIS WAS the year in which the mammoth new homes machine shuddered to a halt and all talk of a soft landing went out the window.

Estimates of the number of new homes that will be built in the Republic this year vary widely. Department of Environment (DOE) figures indicate that 2008's completions figures will be in the region of 48,000.

The real figure for construction activity in 2008 is closer to 25,000 units, says Hubert Fitzpatrick, director of housing with the Construction Industry Federation (CIF). The DOE's completion figures relate to many houses which were underway in 2007 and merely completed in 2008, he explains.

Either way both these figures are a far cry from the record 88,000 homes that were built at the height of the boom in 2006.

Construction started off slowly in 2008 with developers taking a cautious approach, but by the middle of the year sites were closing, planned schemes were put on ice and no new homes scheme of note was started.

Following the lead of Capel Developments who offered reductions of up to €100,000 at its scheme in Ashtown, Dublin 15, in December 2007, developers cut prices in a bid to breathe life back into the new homes market.

Reductions of up to 25 per cent and incentives such as offers to pay mortgages for limited periods mopped up a number of sales, but the pool of buyers had completely dried up by the summer season.

By the time Bernard McNamara's much-anticipated Elm Park development in Ballsbridge hit the market in September, even the offer of price reductions and interest-free loans was not enough.

Ray Grehan of Glenkerrin Homes, who offered a similar finance deal at his upmarket scheme in Stillorgan, The Grange, says that, "2008 is a year the construction industry will want to forget. The first six months were sluggish and then we were hit with a interest rate hikes in spring and July. They combined with the credit crunch to send us into a downward spiral."

His company is on target to complete 245 sales in 2008 over three sites in Dublin (St Edmunds, The Grange and Ballintyre). "This is down by 100 sales on where we would like to be but it is good going for a very tough year."

Grehan says that Glenkerrin was lucky enough to be mid way through the building cycle and have a number of good sites established when the trouble hit.

However, Grehan says there are signs that the market is starting to come back. "We have sold more units in the last eight weeks than we did in the previous six months." Signs that there are further interest rate drops on the way will make for a more optimistic 2009, he says.

That said, Glenkerrin, like every other builder, has had to cut staff. The company had about 1,200 people employed directly or on contract on its various sites this time last year. Today there are about 100.

"It is a tough decision to lay off people that have been with you for 10 to 15 years. We hope to get them back working for us when things pick up."

According to CIF figures 30,000 construction jobs have gone and a further 40,000 will be lost in the coming year.

For the last quarter of 2008 the focus of debate was not on how many houses were going to be built in 2008, but how many unsold new homes were lying empty and how many construction workers would lose their jobs.

A report by Goodbody Economic Consultations in October stated that 50,000 unsold houses overhang the market.

This analysis was criticised by the construction industry, which said the figure was 35,000 units.

"Very challenging," is how Ken MacDonald from Hooke MacDonald defined 2008, a year when starts in the capital were down 42 per and prices back by 30 per cent.

MacDonald predicts keen prices next spring. "Developers are pretty realistic about prices and will put stock out there at prices that will sell."

The CIF is predicting that there will be no more than 25,000 units built in 2009. This, according to Fitzpatrick, will consist mostly of public house programmes, one-off housing and a limited number of new home schemes.

The industry is pinning its hopes on interest rate cuts to kick start interest in new homes and banking on a pent-up demand to clear the large overhang. Like everything, this demand, if and when it reappears, will be much more restrained.

As Grehan says: "We built ahead of the market and now we have to take the foot off the pedal and wait for the market to catch up. Never again will 90,000 houses be built in a year in this country."