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Irish companies are increasingly having to look abroad to fill roles

Written by Robert McHugh, on 12th Nov 2018. Posted in Ireland

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Ibec has today released its latest Quarterly Economic Outlook for the third quarter of 2018 which forecasts strong growth of 4.5% in 2019  following growth of 7.8% in 2018.
 
Despite the positive overall economic backdrop, Ibec analysis suggests that during 2019 Ireland will increasingly approach a late stage in the business cycle globally. At home Ireland is already seeing signs of the type of competitiveness loss which eroded previous periods of sustainable growth. If this is left unchecked, Ibec warn it has the potential to slow growth over the coming years and leave Ireland very exposed in the event of ongoing global trade turbulence or a future global downturn.
 
Feedback from Ibec members is that companies are increasingly having to look abroad to fill roles. Ibec say employment growth is strong and Ireland’s labour force participation and unemployment rates will converge on developed world norms in 2019. 

In addition, Ireland's working age population, before migration, is expected to grow by between 15,000 and 20,000 persons a year. The remainder of labour demand will have to be serviced from growing net migration and increased hours from existing part-time workers. Ibec say attracting workers will only be possible with a strong policy focus on quality of life issues – such as housing supply and affordability – where we lag our competitors. 
 
Commenting on the report, Ibec's Head of Tax and Fiscal Policy, Gerard Brady said, "The story in today’s report is a broadly a positive one, the economy is growing, trade remains robust – if uneven, and households are clearly benefitting through rising real incomes. Consumer spending is growing by almost 4% in volume terms and has the potential to grow further as household balance sheets normalise into 2019. We have been here before, however. Previous periods of rising living standards gave way to higher costs for businesses and households, a lack of focus on productivity and an eventual erosion of the basis for sustainable growth."

He added, "Growing domestic costs, rising interest rates and oil prices, along with the depreciation of Sterling is now putting significant pressure on our businesses – particularly in indigenous sectors already exposed to the threat of Brexit. If we cannot avoid a renewal of our boomtime wage-cost spiral, we will crowd out our exporters and see inflation erode the benefits of wage growth. We cannot use a tight labour market, rising oil prices and future interest rate hikes as excuses for inaction on the things we can control - like investing wisely in skilled workers and controlling other areas of our cost base."

Source: www.businessworld.ie

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