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The Irish construction sector has gone through a period of unprecedented boom, with year-on-year growth of 11-12% between 1994 and 2000. But that trend has come to an end – the so-called Celtic tiger no longer roars, but miaows.

Growth in the construction sector has fallen to 2-3% in 2001 and analysts warn that the problems have only just begun. Annette Hughes, a construction specialist at Irish economist DKM Economic Consultants, says: "The growth in construction output could well be negative next year."

She adds that the introduction of the euro will prove a slight boon to the industry, as it will ease the process of exporting building materials to Europe. But contractors will not benefit greatly as most of their work is domestic. The effect of the euro will be to ostracise UK firms from Ireland, argues Irish contractors' body the Construction Industry Federation. "The problem for the UK is that, with sterling so strong, Irish firms will be keener to go to Europe to pick up materials."

But engineering and environmental consultant White Young Green thinks Ireland offers plenty of opportunities for UK firms. The company has acquired four companies in Ireland in the past 12 months, and chief executive officer Richard Brayson says the market still appears buoyant on the ground.

Ireland on the UK
There is a bit more of the ‘craic’ in Ireland on site – we’ve all got a bit serious in the UK

Don Houston, senior project manager with Heery

Brayson believes the Irish culture has also appealed to the company's staff. He says: "Our staff have enjoyed going out there; it's a socially exciting experience and quite relaxed."

The real problem for construction in Ireland is the slowdown in housebuilding. But in December's budget the Irish government made moves to stem the housing crisis, abolishing stamp duty on houses bought second hand to rent out.

Contractors have welcomed government's attempts to prop up construction. Bernard O'Connell, managing director of the Sisk group, applauds measures to invest £343m in roads, transport, housing, education and health infrastructure.