A new report has been issued today by the the National Competitiveness Council (NCC) which indicates that the improved competitiveness of Ireland’s exporting sector has been one of Ireland’s greatest strengths in recent years and has been key to economic growth and job creation.
'The Costs of Doing Business in Ireland 2016 report' concentrates on costs that are largely domestically determined such as labour, property, energy, water, waste, communications, business services and considers both price levels and changes in those levels (i.e. price inflation).
The report shows that despite improvements in Irish cost competitiveness since the global financial crisis, threats to continued economic success abound.
While the Irish economy is experiencing rapid growth, the global economy is not proving as robust with growth prospects in emerging and advanced economics far from certain.
According to the report, to embed and sustain the recovery and to ultimately spread the benefits of economic growth to all, Ireland must continue to enhance all aspects of competitiveness.
Specifically in terms of costs, the cost base for enterprise has improved across a range of metrics since 2009, (e.g. the cost of starting a business, communications costs and average income taxes). Ireland, however, remains a relatively high cost location and already the return to growth has resulted in a series of upward cost pressures.
The report also highlights the high costs associated with a range of business services including legal services and commercial insurance. Relatively expensive legal service costs allied to a rapid escalation in commercial insurance premiums impact upon virtually all enterprises in Ireland. The upward trend across a number of other business services also serves as a warning signal that cost pressures are emerging in a myriad of sectors.
Chairman of the NCC, Prof Peter Clinch said, "Over the course of the recession, the Irish economy underwent a sharp correction in terms of our cost competitiveness. The recent appreciation of the euro vis-a-vis sterling provides a timely warning about just how vulnerable Irish firms are to external shocks."
He added, "The appreciation of the euro has placed Irish exporters under increased cost competitiveness pressure. This reinforces the importance of prioritising policies and actions that are within Ireland’s control to enhance cost competitiveness."
Source: www.businessworld.ie
