Economy needs more top jobs - IBEC

More investment is needed in highly-skilled, well-paid research and development jobs if the economy is to grow and living standards improve, it was claimed today.

As the business federation IBEC predicted the economy would grow by 4.8% this year, chief economist David Croughan warned there was an over-reliance on jobs in the construction industry.

While the sector was performing well at present, Mr Croughan insisted more growth was needed in more productive, higher-income fields.

IBEC predicted Gross National Product, which is the value of goods and services produced in the State by Irish firms and excludes foreign multinationals, will grow by 4.8% this year and 5% in 2006.

“The main concern for the sustainability of strong economic growth was the over-reliance on the construction sector and on other sectors of low measured productivity performance,” he said.

“It was in these sectors that the bulk of the increase in employment had occurred. This imbalance would result in lower productivity growth and, therefore, lower levels of income per head.

“Our strategy is to generate more growth from higher income activities and this required a higher level of resources going into R&D and an increased emphasis on training and education.”

IBEC’s economic outlook matches stockbroking firm Davy’s assessment which predicted growth of 4.7% for the year.

But the forecast varies slightly from predictions made by the country’s leading think-tank, the Economic and Social Research Institute.

Earlier this year the ESRI reported that GDP, which includes the influence of multinationals on the economy, would grow by 5.7% this year.

This compared to the Government’s own growth forecast of 5.1% for GDP and is also significantly ahead of official growth figures for the year to date.