With the economic watchdog group, the ESRI recently predicting that the country is set to enter a recession, Marie Madden speaks to one of Galway's most successful businessman and former Mayor Mícheál Ó hUiginn about what the downturn means for business in the West.

Mícheál Ó hUiginn's foray into the business world began at the tender age of 22, when he took over his family's builders' providers business following his father's death. Over the next 44 years, O hUiggin Teoranta went from strength to strength, supplying almost 70 per cent of the furniture to all primary schools in Ireland at its peak.

A member of Galway City Council since 1964, O hUiginn has also served as Mayor three times and experienced the changes in the city, through its development from small town to tourist city. And, to cap it all, the Taylors Hill native was awarded an honorary degree at NUI, Galway for his work in business, civic life and local government last Friday.

Businesses around town are now facing tough times ahead with a recession looming on the horizon, but Ó hUiginn says that Galway companies are in quite a good position and should not get carried away by the gloomy forecast.

"The building industry is being hit the hardest by this downturn, with contracts dropping by 60 or 70 per cent, but this is not the first time it has happened. We had depressions in 1970, 1974, 1979 and things were very bad in the 1980s. From 1990 on, there was the biggest boom and people got carried away with it. The banks built that boom. They threw money at people! The economy will probably stay at this level for a number of years now, depending on external factors. People are very cautious of spending at the moment and that is having a knock-on effect. I don't think we will ever see a boom like that again; we will have to be more careful and prepared in future.

However, he says, overall Galway is doing very well, so there is no need to be depressed. "Right now we need to deal with the realities and see if we can look at newer industries that are still going strong, for example factories producing cardiology equipment. We need to focus on these and help keep them productive. These industries need to be nurtured and taken care of. This doesn't always happen as they are sometimes taken for granted," he says.

Having said that, he adds, there may also be indirect knock-on effects on business due to the increasing pressure on the government's finances.

According to Ó hUiginn, many road projects such as the Galway Outer Bypass may be in danger as budget restrictions are put in place.

"As this recession takes hold, there will be a lot less money around, and that includes the government finances. There is a long list of road projects that have been planned but, most likely, a lot of these will fall by the wayside as times get tougher. Unfortunately, Galway seems to be towards the end of the list and I can see a lot of local projects being cut as any remaining funding is invested in the East of the country."

Ó hUiginn blames near-sighted local representatives for not pushing forward with these projects, saying they are too focused on constituency work instead of looking at the big picture. "The current councillors have no understanding of major financial issues; there is no one there who can look at the big picture. Instead, they are too concerned about local issues. There has been a big change of emphasis in the last eight years. The councillors at Galway City Council are not pro-active about the growth of Galway. They have a very negative attitude and this is reflecting on how the city is seen. They should be talking about the city in more positive terms and putting a good outlook out there. Mistakes were also made in relation to Eyre Square," he says.