Irish construction spending will fall to €10.5 billion ($13.5 billion) next year from a peak of €39 billion in 2007 as a new home slump spreads to commercial building, according to Davy.
“The deep recession in the sector will intensify if anything over the next year,” Rossa White, chief economist at Davy wrote in a note today. “Most of the incremental weakness in activity will shift from housing to non-residential.”
A slump in building has pushed Ireland into its first recession for more than a quarter of a century, with Taoiseach Brian Cowen forecasting the economy will shrink by around 10 per cent between 2008 and 2010.
Construction will amount to less than 8 per cent of the economy next year, down from 24 per cent in 2007, Davy forecast.
House building starts are likely to stay below 10,000 units per year for at least two years, the report said, while commercial building is facing a “bleak outlook in terms of credit and occupancy.”