Job losses in the construction industry will soar above 30,000 by the end of next year if anticipated cuts to Stormont's capital budget go ahead, MLAs have been warned.
Acknowledging that a reduction in Northern Ireland's block grant was inevitable, the Construction Employers Federation told the Finance and Personnel Committee that the Executive could still take action to limit the impact to the building trade.
Federation manager Ciaran Fox called on ministers to divert funds from the annual revenue budget to the capital stream to enable the major infrastructure building projects, upon which his members rely, to proceed.
He said official statistics show that 21,000 jobs have been lost in the 30 months of the downturn thus far.
“Our sense is that if the cuts are anywhere near the levels that are being talked of, the rate of job loses will continue at least at that level and we are talking about well over 30,000 jobs in total being lost by the end of 2011,” he said after the committee hearing.
Chancellor George Osborne is expected to announce huge cuts to the Northern Ireland block grant later this month.
This will include cuts to both the revenue stream and the capital budget.
While Mr Fox said cuts to the revenue budget would also hit his industry, he said a reduction in the capital spend would hit harder and have a greater negative impact on the wider economy and society.
“For every one pound invested in infrastructure there is an economic return of £2.84,” he said.
“There is also the legacy of all those projects. Every school that's built, every hospital that's built has a real social benefit. A reduction in the capital budget will mean some of those projects won't be able to go ahead.
“And, of course, in the longer term we have a need to grow the private side of our economy; we need the infrastructure in place to do so, so at this time to actually cut infrastructure spend is the last thing that we can afford to do if we are really determined to grow our private sector.”
He added: “The one thing that the Executive has in its power that we would encourage them to do is the ability to transfer some of revenue budget to the capital. There's a need to sustain capital investment. If cuts have to be made, and they do — there's no question about that — they should be made in areas that have a low social or economic return.
“We are saying that investment in construction has a very high social and economic return, so it should come very much down the list in priorities for cuts.”