Bank of Ireland economist says construction boom can be maintained

"Recent signs from the US augur well for a pick up in Irish Business spending in 2004," according to Bank of Ireland Chief Economist, Dr Dan McLaughlin who went on to conclude that "this and other prevailing factors mean that the construction sector is living through an unprecedented boom period, which has yet to run its course."

Dr McLaughlin was addressing the National Construction Conference of which Bank of Ireland Corporate Banking was a key sponsor.

The conference heard that the sector is in a golden age in terms of output, employment, wage rates and profits. Employment in construction in Ireland topped 190,000 in May of this year, the highest on record, and pay for skilled operatives rose by over 80% from 1996 to 2002, reflecting the strength of demand for workers in the industry.

Dr McLaughlin explained, "the boom in residential housing is a key factor driving construction. The scale of the increase in the Irish housing stock is unprecedented in the western world; some 60,000 housing units will be completed in 2003, for a population of 3.9million, against 175,000 in the UK, where the population is 59m.

While business spending on construction has fallen across the globe since early 2000, the recent signs are encouraging from the US which augurs well for a pick up in Irish business spending in 2004. Indeed, despite perceptions to the contrary, FDI inflows into Ireland were running at record levels in the first half of 2003, at Eur10bn, which is supportive of construction output. Finally, the public sector is spending over Eur5.5bn per annum on infrastructure, equivalent to over 4% of GDP, which is likely to persist into the medium term given the infrastructural deficit in Ireland.

3 October 2003
Contact:
Anne Mathews
Media Relations Manager
Bank of Ireland
Ph. 01 604 3836
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