Exceptional growth in the economy despite Covid

Business representatives group Ibec said the economy is going through a period of « exceptional growth » despite Covid and this should allow the hardest-hit sectors to be supported during the winter under the Employment Wage Support Scheme.

In its latest quarterly economic outlook report, Ibec expects the economy to grow 13% this year and 6% next year.

IPIC says the biggest obstacle to future growth will be a labor shortage.

It expects costs such as energy to remain high next year and then recede.

The employers group says that the biggest risk to continued trade growth will be supply chain problems rather than lack of demand.

Today’s report says that if shopping habits repeat the pattern of recent years, Irish consumers could spend upwards of €5.4 billion over Christmas.

It expects the average family to spend around 800 euros but expects spending on services to fall due to the restrictions.

It also indicates that online spending by consumers here has remained at the high level that started during the Covid. It says spending on debit and credit cards is up 50% from 2019 levels.

IPIC describes the labor market as being at its narrowest since the early 2000s with 2.4 million people employed – the highest rate in the state’s history.

It says population growth would have added about 20,000 to the workforce through 2016, but he estimates the contribution this year was only about 13,000.

It expects between 2020 and 2025 that the population will contribute an average of only 10,000 per year to the labor force, declining to 7,000 per year as of 2025 due to an aging population.

Ibec also warns that the high cost of living here will limit Ireland’s attractiveness to migrant workers and that we cannot expect to see the same level of immigration that we saw during the boom years.

She also warned that the situation regarding housing and the cost of childcare needs to be improved, otherwise the economy will slow down and lose its competitiveness.