A meeting between Prime Minister Jose Luis Rodriguez Zapatero and top firms in Spain’s struggling construction industry was called off on Monday.
Building sector bosses wanted to protest over government plans to cut 6.4 billion euros from infrastructure spending as part of austerity measure intended to slash the budget deficit.
They said the spending cuts would put more than 100,000 people out of work.
They are also concerned about delays in payments from cash strapped local authorities: reportedly 3.5 billion euros is owed for work already done.
Wednesday’s meeting had been proposed by the Public Works Minister Jose Blanco, but a government spokesman said it has been postponed indefinitely with no new date set.
Economists argue Madrid has little spare cash to support the construction sector – which has struggled since the collapse of Spain’s property boom – while growth remains weak and unemployment stands at 20 percent.
They say the government should focus on slashing its public deficit, which the government maintains is its number one priority.
European Central Bank Executive Board member Jose Manuel Gonzalez-Paramo was recently quoted as saying Spain would have to make additional budget cuts in 2011.
However, construction companies, argue that the sector is still an essential contributor to the economy and projects cannot be turned off overnight.
Construction lobby group Seopan called for government support for the sector in July, pointing out it accounts for 10 percent of Spain’s economy.