SSIAs ‘set to fuel consumer boom’
This is according to the Small Firms Association (SFA) which said that despite the cost, more people than ever are buying houses, cars and holidays.
They expect at least 20% of maturing SSIAs and up to 50% of discontinued savings to be spent in 2006.
In its end-of-year statement, the SFA said that the outcome for 2005 was very positive and that prospects for 2006 are strong.
The SFA forecast for 2006 is for continued full employment, GDP and GNP growth of 5% and for exports to grow by 5%.
SFA director, Pat Delaney said: “2005 has been a remarkable year for the small business sector. Despite the difficulties encountered during 2005 in energy, oil and local authority costs, the small business sector continues to thrive on the back of the greatest period in our economic history.
“Ireland has achieved a remarkable feat in 2005, full employment, average inflation of 2.6%, GDP growth twice that of the EU and despite the recent increase, interest rates remain at historically low levels,” he added.
Mr Delaney said that we are spending more money on health, education, housing, welfare, roads and transport than at any time in our history.
“We have increased our workforce beyond two million for the first time and the number of days lost to industrial disputes has fallen from around 400,000 in the 80s to about 20,000 a year in 2005,” he said.
Mr Delaney added: “While there is no crash on the horizon, the Irish economy is now growing at a slower pace and decisions need to be framed accordingly.
“With domestic inflationary pressures remaining strong, many export businesses are under severe pressure, as Irish production costs remain higher than those of our competitors.
“Taken in the round, the projected economic environment for 2006 brings Ireland’s competitive position into sharper focus and makes a compelling case for spending growth to be limited, wage increases which are right for the economy at this time, major changes in the costs of providing local authority services such as water, waste and environmental and delivery of the long overdue benefits of the liberalised energy market,” he added.
Mr Delaney said that the twin challenges for 2006 must be to regain competitiveness and to permanently eliminate the inflation differential with the rest of the Eurozone.
“This requires putting in place coherent policies across a range of policy areas including fiscal, incomes, labour market, competition, regulation and trade.
“The Government must be strident in its resolve to deliver speedier public sector reform and ensure that there is no upward pressure on inflation through increases in direct or indirect taxation,” he added.
