Crunch

There are two major factors behind the crisis in the construction industry. The first is the deflationary policy of the government. Deflation means limiting the supply of money ‘o the consumers. This policy is being wsued by cutting wages and limiting the Qunt of credit available from financial tutions.

ne .atter aspect of this policy has serious consequences for the construction industry, Building firms have to keep large stocks of raw materials on hand especially since the serious supply problems encountered last year. McInerney Properties Ltd., for example, currently has £3m alone tied up in stocks of timber at its joinery plant at~ Cappencur. Also the sales of houses is a slow process and some companies are complaining that they have to, wait up to five years before they get final payment.

Spiralling interest rates plus leaping inflation are all on the time eating away at money which is tied up like this. Last year the interest rates of Associated Bank’, which supplies construction with nearly half of its credit, rose on six occasions. Inflation rose by 11.4% in 1973 and by all estimates will reach 22% before 1974 is out. The devestating effect this has can easily be seen in the recent performance of Mcinerney’s Irelands second largest construction company. Last year this company made a profit of £794,000 while in the first half of this year it-has lost £800,000!

Colipase of market The second factor in the biilding crisis is the fall off in effective demand — although the great human need for housing still exists the homeless cannot afford to buy houses, Here the two aspects of deflation — wage restraint and the credit squeeze operate together.

The price of houses rose on average by 30% last year but wages, if they increased at all, came nowhere near such a figure. Consequently, fewer workers than ever can think of purchasing their own homes, Also, the Building Societies, financiers of the greater share of house purchasers, have become uncompetitive. Financial speculators prefer to invest with assurance companies where lucrative outlets are found for money that would otherwise have flowed into housing, The Building Societies say that the money available to the to loan out is down £8,000,000 on last year. The only alternative credit now available to house purchasers is short-term loans from the commercial banks, But with an interest rate of 15% on such loans this isnot likely to help. much.

As a result of these factors the sales and future construction of houses have collapsed. The Construction Industry Federation estimates that as many as 3,000 houses out of 17,000 built in the private sector last year remain unsold. And as far as future construction is concerned, a spokesman for Mc Inerneys last June estimated that housing starts were down 40% in the first half of this year on the same period last year. Around the same time the economic journal Business and Finance reported other builders as putting the decline in starts as high as 50% a Se Politics and authority In addition to the two important factors listed above; the building crisis is intensified by another subsidiary factory.

There is a sharp power struggle going on between the National Coalition and Fianna Fail. It is well known that the construction industry as awhole and in particular the big three, McInerney, Gallagher Bros. and the Jones Group, provides a major source of support for Fianna Fail. Under the guise of ‘‘progressive social policy’’ the Labour Minister for Local Government Mr. Tully (who is also or trying to channel house construction into the public authority housing which accounts for only 30% of total housing construction at the moment where there is greater control and less profits. Tully's obvious aim is to break the powerful political influence built up in this sector under Fianna Fail guidance but without at the same time making more or cheaper houses for the work ing class.

Workers carry the load But if the magnates of the construction industry and the government are at loggerheads over the direction the industry should move in, they are both united in their attempts to make the workers carry the load.

The Construction Federation Industry ‘is actually boasting about the large number of redundancies in its sector. On October the 31st, Tom Reynolds, Managing Director of CIE said that a survey carried out by his organisation, showed that 80% of building workers had been laid off. But paradoxically, Paddy Duffy, Secretary of the Building Workers Unions (who once had a bit of a name for himself as a ‘‘leftawinger’’) rushed to cover up for his colleague, James Tully, by denying the report! __ In the meantime the building workers suffer from the deflationary attacks of the government and the powerstruggle between the National Coalition and Fianna Fail. Their plight is aggravated by the terrible conditions in the industry. For instance, most workers receive only a ten minute break in the mornings and thirty minutes for lunch. Combined with this, sites are continually breaking up and contract labour is usually introduced, All this makes it very difficult to unionise the building workers — only about 40% of unskilled workers and 15% of tradesmen are organised. Consequently the workers on the construction industry are very weak when confronted with the machinations of the employer and government.

Despite this weakness, these workers have to fight not only their immediate employers but also the government. The governments deflationary attack on the whole working class is aimed firstly at the building workers. They occupy the front line in the long battle that lies ahead. Apart from fighting for immediate improvements and reforms they must raise such demands — no matter how difficult. it will be to win them — as nationalisation and state intervention, a scheme of public works sharing all work with no loss of pay and of the working class as a whole. Industry Group: Textiles Clothing & Footwear:

----- pull-quotes -----

the resignation from the government of the Labour Ministers, which can win the support