Davis Langdon PKS (DLPKS), one of Ireland's leading construction cost management firms have said they remain optimistic despite predictions of a -7% reduction in the volume of construction in 2008.

DLPKS released their annual review for 2007 on February 5 which stated that although the housing market has slowed down, general construction and civil engineering will continue to grow in 2008.

Davis Langdon PKS said the scaremongering among some commentators that the Irish construction industry is in steep decline should be totally disregarded. In 2007 construction recorded a minor reduction of -2.5% while in 2008 DLPKS expect a reduction of -7%. The Irish construction industry remains strong and vibrant and will build €36bn worth of buildings in 2008.

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Norman Craig, Managing Director of DLPKS said: "We shouldn't become too concerned about what is, in effect a minor decline in the total volume of construction. To put this in context, we will invest €36bn in construction in 2008 compared to €24bn in 2003 and €11bn in 1998. By any standards this is an achievement to be proud of."

Housing continues to be the key driver in the Irish construction industry. In 2006 housing accounted for 68% of the total of new construction and therefore any change in the housing market has a profound effect on the total volume of construction. Housing output peaked in 2006 with 88,000 units completed that year. DLPKS estimate that the figures for 2007 are around 75,000 completions and their forecast for 2008 is 50,000 to 55,000 completions.

Mr Craig said: "This again needs to be put in the context of 57,700 completions in 2002 or 42,000 completions in 1998. We have returned to a level of housing completions that is realistic and this needed to happen at some stage."

While the housing market slowed down, general construction continued as the star performer of the Irish construction industry. Investment in public buildings in health, education and the Office of Public Works showed a 30% increase in volume in 2007 with a total investment of €2bn.

The private sector was equally buoyant with commercial building, retail and industrial building growing by 25% with a total expenditure of over €4bn.

(GK/JM)