Green Shoots in Construction Industry Challenged by Government Policy, says Developer

I think the government needs to provide incentives to get people back to work, said Mr Neary.

“A lot of these lads have worked hard all their lives and haven’t really much to show for it … they are probably used to living on that little bit less and are not that interested in coming back to work,” said Mr Neary. “We found that not with just one or two fellas, but with lads that would have been working 6 days a week for us up until a year ago, seven in the morning until eight a night.”

“In the boom times we struggled to get good labour and we thought that would be one bonus when things picked up … what’s happening is that the good labour is not starting to emerge … it’s a problem.”

Certain green initiatives have made tough times tougher

Renewal of dumping permits at a annual cost of approximately 2000 euro is tough when your turnover is down, claimed Mr Neary. “When you’re going week to week trying to service and keep your head above water, costs like these don’t help.”
It would be nice if this and other similar costs could be "shelved" until the recovery is guaranteed, said Mr Neary.

Mr John Neary, originally from county Mayo, qualified as an engineer in Galway during the late 80's, after which he worked in the construction industry in the UK for 5 years. He subsequently returned to Ireland in the early 90’s when the economy was starting to pick up here.

In 1996 he set up a civil engineering company in Maynooth called Euromist Developments with his partner, and from then until the downturn, Mr Neary said that “business just snowballed.”

A couple of years ago they had clients such as Dublin developers Cosgrove Brothers and Dorval Homes.
They carried out project work for Duggan Brothers for the redevelopments on Mountjoy prison, the aquatic centre in Abbotstown and the veterinary research centre in Clane. At the height of their powers Euromist had upwards of 100 people working for them, and the future seemed bright.

Ironically though, at the apex of the boom, when they employed such a considerable number of people, their profit margins weren’t what they had expected. “We were getting very good rates for doing the work relative to what we are getting nowadays … but from our side labour costs just shot through the roof … any profit we were expecting was eaten up by labour and fuel costs.”
Since the recession began Euromist's work force has been reduced to about ten. ”I’m finding it a real struggle” sighed Mr Neary.
Fuel costs were and are still substantially high for Euromist due to the nature of their business. Skilled labour was essential due to the machinery and the care it needed, which added a premium to their labour costs.
Mr Neary has found that the industry during the last year and a half to two years has quietened off considerably, but thankfully the last month has seen a glimmer of light and signs of green shoots.
This bodes well for Mr Neary as his major cost, labour, has been reduced by between 15 – 20 % since the heydays of the Celtic tiger, even if fuel costs still remain high.

Banks

In the past Mr Neary's bank was more flexible when it came to credit to help with cash flow. “You could tell them you were expecting a couple of hard weeks and they would play ball with you: suddenly, in the last year, the banks aren’t giving us much leeway at all.”
Mr Neary said that he found similar trends while talking to those in the sector and that he believes that the banks are “squeezing in on everyone”.

Personal trials

Mr Neary has lived in Wexford since 1998, and since moving there has had to commute to Dublin every day. This meant leaving home at 4:45 am and returning after 9pm. This too has had an impact on his family life. Up until last year he worked 6 days a week. “Now you have to put in even more of an effort to just keep things flowing”.
“You have to stay positive, keep the head down and keep going.”
Even with all the hassles Mr Neary still finds time to think of others. He has recently been helping out with the Haven for Haiti project which helps build homes for those who are less fortunate than most.