‘Exceptional growth’ in economy despite Covid – Ibec
Business representative group Ibec has said the economy is going through a period of “exceptional growth” despite Covid and that should allow the worst impacted sectors to be supported through the winter under the Employment Wage Subsidy Scheme.
In its latest Quarterly Economic Outlook, Ibec expects the economy to grow this year by 13% and by 6% next year.
Ibec says the biggest barrier to growth in the future will be labour shortages.
It expects costs such as energy to remain high into next year but then to subside.
The employers group says the biggest risk to continuing trade growth will be problems in supply chains rather than a lack of demand.
Today’s report says that if shopping habits repeat the pattern of recent years, upwards of €5.4 billion could be spent by Irish consumers over Christmas.
It expects the average household to spend around €800 but expects spending on services to be subdued due to restrictions.
It also notes that online spending by consumers here has stayed at the elevated level which began during Covid. It says spending on debit and credit cards is up 50% on 2019 levels.
Ibec describes the labour market as being at its tightest since the early 2000s with 2.4 million people at work – the highest in the history of the State.
It says population growth would have added around 20,000 to the labour force as recently as 2016 but estimates the contribution this year was only around 13,000.
It expects between 2020 and 2025 for the population to contribute just an average 10,000 a year to the workforce, falling to 7,000 a year from 2025 due to the ageing of the population.
Ibec also warns that high living costs here will limit Ireland’s attractiveness to migrant workers and that we can’t expect to see the same level of immigration which we saw during the boom years.
The situation around housing and the cost of childcare will need to be improved, otherwise the economy will slow and lose its competitiveness, it also cautioned.