Clear Warning Signals for Future of Irish Economy

28 Jul 2006

The Irish National Organisation of the Unemployed is concerned at dangers for the Irish economy in the years ahead and resultant prospects for employment and unemployment. Current commentaries from the ESRI (on the economy) and FAS (on the labour market) point up some worrying issues for the years ahead and especially from 2008.

There are worrying indicators that our economy could run out of steam when the current SSIA spending splurge ends in 2007 and when the construction industry peaks, possibly in 2007. The ESRI report paints a poor picture of our export performance going forward. Our current economic boom is largely predicated on consumer spending and construction activity. The long term success of a small openly-traded economy like Ireland’s must be based on good export performance, to support and finance other parts of the economy which consume imports. Our export growth rate has not been good in recent times and given the relentless reduction in employment in recent years of the manufacturing sector (which provides most of our export potential), the future prospects are not good.

Recent FAS figures show that the only sector to show a decline in employment in the last 12 months was manufacturing, which is the one most exposed to international competitive pressures. This sector was the only one where earnings growth decelerated. Many manufacturing companies have closed in recent years and moved their operations to low-cost economies in other parts of the world.

With increasing oil prices, rising international interest rates, geopolitical tensions in the Middle East