However, the lobby group did welcome the continued availability of full mortgage interest for first time buyers who purchase their new homes in 2010.
Speaking in the immediate aftermath of Finance Minister Brian Lenihan’s Budget Speech, CIF Director General Tom Parlon said: "The Government's decision to target the capital investment programme is regrettable in light of the huge loss of employment already in the construction sector and the impact this is having across the wider economy.
"The fact that the cuts disproportionately affect the construction intensive elements of the programme is particularly disappointing from a jobs perspective."
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He continued: "The capital budget for the period 2010 to 2013 has now been reduced by over €15bn as a result of measures over the last four budgets. In real terms, this means the cancellation of a large number of school building, social housing, water services and transportation projects.
"This will directly and significantly impact the future competitiveness of the economy and Ireland's ability to attract inward investment.
"The most immediate impact of the cutback, however, will be felt by the Exchequer. Over the last rwo years, 200,000 jobs have been lost in construction and its related sectors.
"A further 100,000 jobs are at risk because of the reduced level of both public and private investment.
"The CIF has repeatedly made the point that investment in construction offers the most immediate and most effective means of stimulating economic activity and protecting jobs and that this has been the tried and trusted approach adopted internationally.
"We regret the fact that the Government here has chosen instead to reduce its infrastructure spending," he said.
Referring to changes in the housing market, Mr Parlon said: "While disappointed that the Minister has indicated his intention to abolish mortgage interest relief in the longer term, the CIF does welcome the fact that he has provided a transitional period of 18 months for first time buyers.
"This means that first time buyers of new homes in 2010 will continue to qualify for maximum mortgage interest relief for purchases during the year."
See: Budget Cuts Capital Projects
(NS/BMcc)
