The CIF warns Government not to sacrifice Capital Spending to meet current expenditure problems

The Construction Industry Federation (CIF) will today warn the Government they risk completely crippling the sector if they sacrifice any more capital spending to meet current expenditure problems.  At their annual conference which is taking place in the Aviva Stadium in Dublin today they will point out that any more capital spending cuts will further reduce construction employment adding to the level of unemployed construction workers.  

1 out of every 2 jobs lost since the downturn began have been from the construction sector and the CIF is concerned that more capital spending cuts will further increase that figure.  In 2007 the number of people directly employed in construction was 269,900[1] <#_ftn1> however that has fallen by 170,000 since the downturn began and now stands at 98,800[2] <#_ftn2> .

For last year’s Budget the Government targeted a spending reduction of €2.2 billion.  Capital spending was cut by €755 million for 2012, representing 34% of the proposed cuts.

There has also been recent speculation that funding assigned to the school building programme will be sacrificed to meet the cost of unexpected teacher retirements.  The Department of Education may face a bill of an additional €50 million for these unanticipated retirements.  The CIF estimates that if this were taken from the school building programme it would delay approximately 12 – 14 average size new school buildings.

Speaking ahead of the conference, CIF Director General Tom Parlon said, “The Government can’t continue this trend of taking from the capital budget to pay for current spending problems.  All they are doing is putting further pressure on the construction sector which is already on its knees.  There is simply very, very little work for construction companies at the moment.  

“The Government has admitted that this country and our economy needs a healthy construction sector.  That won’t be achieved in the short or medium term if capital spending continues to diminish.  Cutting capital spending will only delay any recovery in our sector.

“It will also make it a lot harder for our members to keep their employees in jobs.  The Government should realise that a construction worker in employment offers a lot more to the Exchequer than one who is on the dole.

“We as a sector want to play our part in helping the economy recover but we can’t do that if the Government keeps sacrificing capital spending on the altar of unsustainable current expenditure,” Mr. Parlon concluded.

Minister for Finance Michael Noonan TD and NAMA Chief Executive Brendan McDonagh are among the speakers who will address the CIF conference today.

The conference is titled Building for the future of the construction sector.