Report claims Irish competitiveness paving way for further solid growth

THE competitiveness lost during the boom years is being regained rapidly, paving the way for solid further growth, a new report said.

Over 400 of the country’s leading executives were given the good news at a major confidence boosting conference organised by IBEC in Dublin yesterday.

This finding ensures that Irish business which accounts for 80% of value added in the economy will deliver “substantial and sustainable economic growth” said Danny McCoy, director general of IBEC, in his key note address.

His key message to conference was strong export-led growth and demand from Irish households, still among Europe’s wealthiest, will drive the economy forward ito sustainable growth.

Irish business has the scale and scope needed to generate “substantial and sustainable growth as the return to cost competitiveness starts to place us in “a very competitive position”, he said.

“Business has reacted swiftly and decisively to the recession. Our costs are coming into line internationally, our exporters are increasing global market share and unemployment appears to have levelled off. We are now positioned for recovery and equipped to create balanced and sustainable growth,” he said.

The IBEC report called “Productivity and adjustment” shows as pay rates and other costs have been reduced, Irish firms are again performing strongly in international markets.

The IBEC study found that major restructuring programmes and a stronger focus on productivity in businesses has delivered average annual unit cost reductions of 7%.

The unit costs over which firms have the most control, overheads and labour, have fallen by much more than this. In order to remain viable, businesses are doing more with less, he said.

Companies and their employees moved quickly and with a flexibility unmatched in any other country, he said.

“We now have evidence that this is working and business is gaining the necessary momentum to drive economic growth,” he said, while much remains to be done to get back to acceptable levels of growth.

It was important this message go out there in the marketplace to demonstrate Irish business continues to deliver in the current difficult circumstances, he said.

Christoph Muller, CEO of Aer Lingus, supported that view. He warned in the new environment “big corporates will struggle” whereas smaller “more agile companies” will be better able to thrive in the tougher more competitive and cost conscious environment.

In the changed global environment the group had no option but to gain greater efficiency and reduce costs.

That resulted in a 10% cut in wages, a three-year pay freeze and a 20% cut in job numbers to counter the 35% drop in airline figures.