THE boss of a leading island-based building firm has warned the construction industry could be badly hit if government withdraws funding for capital projects.
Tony Wood, director of Auldyn Construction, says building firms could go under and thousands of jobs put at risk without further investment.
He said: ‘The construction sector has probably been in recession here for a while but I don’t actually think we are at bottom. It may have hit bottom in the UK and Ireland but I think that it will happen here in the third or fourth quarter of this year.
‘There will be contraction in the number of firms both big and small. Construction had a crucial part to play in the economy. If we want that role to continue, we can’t decimate the construction sector.’
Mr Wood said many major capital schemes were coming to an end – and there were very few new projects on the horizon.
Industry leaders in the Construction Forum together with the Employers’ Federation and the Chamber of Commerce have invited Tynwald members to a briefing this lunchtime (Tuesday) to argue the case for government capital spending to be increased.
He said that criticism in the House of Keys and Tynwald that the construction industry was 70 per cent reliant on government spending was ‘missing the point’.
‘We are getting people on the doorstep saying government is spending too much, but that misses the point.
Diminishing
‘The government’s capital programme is small in comparison to its revenue spend. My view is there are bigger savings to take out of the revenue than there are in the capital programme.’
He said that by 2015 the government’s capital programme will be down to about a third of the size it was five years ago. Government spending has been diminishing, he said – but at a slower rate than the private sector.
‘Demand has diminished but government spending has become a larger proportion of the whole.’
Mr Wood argued that construction was a key driver of the economy, comprising 6,000 jobs and contributing about 15 per of national income – and that it was vital to invest in the island’s infrastructure at a time of economic downturn.
He said for every £1 spent on construction there was £2.80 worth of economic benefit to the island.
‘If we stopped investing we are effectively going backwards – while our competitors Gibraltar, Cayman will be going forwards.’
Auldyn Construction employs some 90 staff. It is the main contractor on the new Bemahague site for St Ninian’s High School students aged 11-14 in Onchan – the largest construction project currently in the island – but this is due to be completed in July.
It is also working on the sheltered housing complex at Four Roads, Port St Mary, but that is coming to an end, due to finish in February.
Mr Wood said: ‘A lot of things are coming to an end but I don’t see many new schemes coming through this year.’
