Irish economy in post-recovery stage – Ibec

The economy is in a strong position and has moved into a post-recovery stage, with households clearly benefiting from rising incomes – according to the latest quarterly economic outlook from business group Ibec.

It forecasts growth of 5.7% this year and a buoyant consumer economy growing by 2.9% in volume terms.

It added there is little sign of this consumption being driven by the excess credit of the boom years and as the economy approaches full employment, the biggest challenge facing the Irish labour market will be finding workers to fill vacancies.

However, in its assessment of the economy, Ibec also warns against complacency on the competitiveness front “at a time when external threats are increasingly likely to materially impact on our growth.

“As the economy comes close to capacity and navigates significant challenges to our external environment over the coming years it is important we make the right decisions to protect our indigenous industry”.

Ibec Head of Tax and Fiscal Policy Gerard Brady said “the economy is growing, trade remains robust despite Brexit, and households are clearly benefitting through incomes which are increasing at the fastest rate in Europe.

“Last year, 19% of Ireland’s workforce either changed job or started working. This is up from 13.4% in 2010 and is a sign of the health of the labour market.

“As a result, Q1 2018 saw the fastest wage growth in the economy since the crisis with average wage growth reaching 2.5% year-on-year. Our view that the economy is now firmly in a ‘post-recovery’ phase is supported by all these factors,” he added.