The Director General of the Construction Industry Federation, Mr. Tom Parlon, said this week that the sector in the South East was well placed to meet the challenges of this year.
Speaking to The Munster Express, prior to his address to the Construction Industry Federation (CIF) South East Annual Dinner in the Woodlands Hotel this Friday night, Mr. Parlon said he would be delivering an upbeat message on the night.
He believed that, as a country and as an economy, we needed to remain vigilant. There were challenges in terms of our competitiveness and in terms of linking proper development with sustainability. However, pledged the Director General, the CIF nationally and in the South East would play its part in this regard.
Continued Mr. Parlon: “I’m delighted to be able to attend my first official CIF event in Waterford with the South East Branch Annual Dinner this coming Friday. The event is the highlight of the calendar year for the CIF members in the Waterford, Wexford and South Tipperary area, which make up our South East Branch. I was officially invited by local Chairman of the Branch, Brian Byrne of Cleary & Doyle and Secretary of the Branch, Joe O’Brien.
“There is no doubt that the ongoing media focus on the future of the house building sector serves to underlie the importance of construction to the Irish economy. The industry has a turnover in excess of €36bn nationally and €4bn here locally in the South East region, while nationally it employs 280,000 people directly of which 32,000 are in this region.
€12b to Exchequer
“Added to this are a further 100,000 people working indirectly within the industry. Due to the scale of the industry both here in Waterford but also nationally, I am very conscious of the need to address some of the concerns about the current downturn in house building activity. Our industry contributed nearly €12bn to the Exchequer last year so there are wider implications for the economy as well as for employment.
“I will be delivering an upbeat message to the CIF members on the night. Because despite the concern in relation to residential housing, the other key pillars of construction are performing strongly. During the speech I will also look at the improved outlook for buyers in the housing market in 2008. The slowdown in housing output in Waterford for example, where housing commencements are down over 42% for the first 10 months of 2007, will have an impact for buyers. In September of last year the CIF made projections that about 25,000 new homes could be built during the first 6 months of 2008, which is well below what is required to meet the housing demand. With rents, including rents throughout Waterford increasing significantly, the underlying demand for new housing is there.
“I believe that one of the keys factor likely to support a more positive housing market this year is the very good value and choice now available to buyers throughout Waterford. This can be seen in the results of the most recent ESB/DKM Affordability Index, which showed that affordability has already improved by 10% on the same period last year. Affordability has also been improved by the significant increases in mortgage interest relief for first time buyers. Meanwhile the reform of stamp duty brings savings and much needed certainty into the market. The other key determinant of affordability is interest rates. The most recent decision by the American Federal Reserve to cut interest rates is a positive sign and the expectation is that the next movement in the European Central Bank interest rate will be downwards. This will have a hugely positive impact on buyer sentiment and will bring further savings.
“There is a considerable amount of public investment in the South East region in psychical infrastructure such as roads, schools and water projects, which are improving the quality of life for the communities that they serve. In addition there is considerable private investment in new retail units, commercial developments as well as the upgrading of existing facilities. This work will ensure the construction industry in Waterford and throughout the South East continues to grow, while at the same time there is a great amount of work still to be done. People throughout Waterford like elsewhere live with the daily reality of deficiencies in infrastructure which need to be addressed to enhance Waterford as a Gateway as set out in the National Development Plan.
“The construction industry in the South East uniquely gives people the opportunity to work and live within their own communities whilst helping put in place the type of infrastructure and houses required as Ireland seeks to grow its economy. I will be talking to the CIF members on the night about the many positives in the industry at present, including the ambitious plans for Waterford and the rest of the country as set out by the government, who have committed to closing Ireland’s infrastructural gap through the National Development Plan, with investment of over €84bn in infrastructure up until 2013”, concluded Mr. Parlon.