Ibec's Head of Tax and Fiscal Policy Gerard Brady stated: “Since the crisis we have seen a recovery in the Irish economy which has been exceptional. This was driven by the strength of the Irish business model with record FDI and an increasingly global footprint from our indigenous industries. Because of this growth in our business substance, the economic recovery phase is now over, with 2017 seeing Ireland surpass many of the most important pre-crisis milestones. As we enter 2018 the State’s accounts are effectively balanced, employment has returned to 2006 levels, and we are seeing the quickest real wage growth in Europe at 1.8%. Irish households are clearly benefitting with real disposable incomes growing at over four times the eurozone average and per-capita income in working households now likely to have passed out its pre-crisis peak.
“This phase is now more sustainable than the ‘boom’ period. It is being underpinned by business investment in plant, machinery and equipment (excluding IP and aircraft leasing activities) of almost €1 billion per month. In addition, figures show that Irish households are now in a positive net ﬁnancial position (deposits outweigh loans outstanding) for the ﬁrst time since the late 1990s. As a result, the net wealth position of Irish households in nominal terms has never been better whilst high Government debt is falling rapidly toward European norms.
“The major question facing the economy over the coming years will continue to be the ability of the economy to meet the needs of a growing population in a sustainable manner. Major challenges are already clear in the housing sector. Our estimates today show that to meet Rebuilding Ireland's target of 26,000 house completions along with other construction needs by 2020 there will need to be in the region of 50,000 additional construction workers. Meeting 40,000 housing units a year would increase this to almost 80,000 workers. Delivering on the promise of growth with stretched capacity and a tight labour market, whilst also maintaining competitiveness, will be a key challenge ahead for both business and the Government.
All indicators are now pointing to strong and sustainable growth in Ireland’s economy in 2017 and 2018 underpinned by business investment and strong consumer spending. The economy has now moved past its ‘recovery’ phase and can look forward confidently despite external threats. It is likely that the Brexit impact on growth in 2018 will be outweighed by positive domestic and global momentum.
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