Fifty percent of Irish construction firms have experienced a complete halt in new building projects, as they continue to try to offload finished contracts, according to a Merrion Capital survey, published today.

The leading Dublin-based stock-broking and finance firm said construction firms believe the current 30% oversupply of housing will take "more than 12 months to clear".

Half of those firms, who reported no current construction contracts, said they do not expect to restart any work for at least another year.

The slowdown in the home buying market in Ireland has been the direct consequence of higher borrowing costs and falling property value.

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This has resulted in new domestic projects floundering, with many firms letting workers go.

According to statistics released last month, the construction industry in Ireland contracted at a record pace in April.

Prompting the Government to suggest that the sector should prepare itself for completions to fall by more than a third in 2008.

A Merrion Capital spokesperson, told the Irish Times: "The overall conclusion from the survey is that house builders expect the downturn in the Irish new residential market to be deeper and more prolonged than they anticipated."

Almost three quarters of those surveyed by Merrion said they expect selling prices to reduce this year; this is in stark contrast to only a quarter of respondents making the same judgement in 2007’s report.

Output decline has been forecast by 40% of respondents, with the general feeling being that there is a "high degree of uncertainty over 2009.'' Most believe there will be no completion increase during next year.

Merrion’s sampled 25 companies, during the past week, all of who construct more than 15 houses per annum.

(PR)