Still a reasonable hope of better times ahead
In its All-Ireland survey, Economic Eye, the consultants are optimistic that Ireland has turned the corner.
Growth will be negative this year, down 1%, but the good news is that we could see GDP rise by 2.8% next year, even it that is coming off a very depressed base.
That figure is in line with the Government’s forecast but is well short of the 4% made previously by Davy.
Even if the growth picture is sustained, the analysis – though very positive – warns of a jobless recovery and of a lost generation due to the awful crisis we have been through.
The short-term outlook is that we are faced with an export-led growth that will not do much to tackle the huge rise in unemployment.
In particular this recovery, if it happens, will be pretty jobless and we will not get back to peak 2007 employment figures for a full 10 years – that is 2022.
The report, compiled by Neil Gibson, & has for the first time cut to the core of what the implications of the depression in this economy are.
He says the experience across the island has been particularly distressing when it comes to the age cohort between 25 to 44.
In the two years of 2008 and 2009, unemployment rose 160,000 in the south. Of those, 56% constituted the “prime working age” category.
In the North, the jobless figure was a more modest 28,000, with 48% of that figure to be found in the 25-44 age bracket.
Those figures look to have several implications for this economy, and Gibson has spoken of “a lost generation” to this country.
That lost generation has been vaguely referred to elsewhere but this is the first one to nail down the figures.
One of the big fears is that a slew of existing and budding businessmen and women, as well as top quality graduates, will be lost to the economy, along with the thousands who were totally dependent on the property boom for jobs.
Many who owned businesses will or have gone bankrupt and thousand will be lost to other economies that offer better prospects.
In a separate development this week, Deirdre Clune, Fine Gael’s innovation spokeswoman, called for revised bankruptcy laws to bring them into line with best practice in Europe.
At a time when starting a business offers the only prospect of work for many, Clune said the law that imposes a 12-year bankruptcy sentence was a serious disincentive to those thinking of going into business. The average time span in Europe is five years and it was time the 1988 law reflected those more realistic penalties here, the TD said.
She also said less severe bankruptcy laws create a healthier business environment.
In the light of the analysis from Ernst & Young, it would be good if the Government looked at what it can do to improve this hostile business environment.
We know the lending environment is still farcical and as a result of lack of funding our indigenous business base is being undermined.
But plusses do exist in the midst of this crisis.
The massive property and banking crash means wages have fallen, state spending has been cut and employing well-qualified people in key areas such as software, consultancy and accountancy is becoming less prohibitive.
The analysis also pointed out that despite market hysteria, Ireland is not Greece and this country has done much more to face down the crisis threatening to destroy our economic base.
Diehard extremists believe we are doomed but our refusal to give up to date suggests those who have been prepared to tackle the underling issues will ensure that in the end we will have a reasonable future – perhaps.
