Despite this outlook, Mr Parlon is confident that the industry can weather the storm by refocusing on other projects, such as government contracts on roads, education and health infrastructure and on private non-residential developments like offices and hotels.

"There was never a better time to roll out public contracts; there's huge value for money out there at the moment. The roll out of road infrastructure, etc, is crucial in relation to spatial planning policies, and promoting Galway as a regional gateway. Where there are bureaucratic delays, they must be addressed."

Reducing prices, as some Galway firms have been forced to do in recent weeks, can only work to a point, he believes.

"There is huge pressure on companies; the price of oil is up significantly, steel is up too. The price of all the inputs is increasing. There are also very, very favourable wage rates compared to other sectors. The pressure is on companies and that is leading to lay-offs."

His advice to companies in the sector is to "manage their way through the process" and to remain confident because "there is a real underlying demand for houses."

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