Strong growth distracts from weak exports - IBEC

Irish business representatives, IBEC have said that a slowdown in the housing sector increases the need to boost exports in order to maintain current living standards.

CSO estimates record that GDP grew by 6% and GNP by 7.4% in 2006. Strong 6.2% growth in consumer spending underpinned this growth.

There was a sharp slowdown in house building towards the end of the year; while housing output is estimated to have increased by 2.9% in the year, there was a fall of 1.7% in the final quarter.

“However, these figures contain no comfort,” said IBEC Chief Economist David Croughan. “Visible exports recorded a volume growth of just 0.5%, with a particularly poor performance in the final quarter of the year, with exports falling by an annual 2.4%.

“Strong service export growth of 12.8% helped to offset this dismal performance and total exports of goods and services increased by 4.9%.

"However, in value terms, net exports of goods and services (exports less imports) fell by 2.6% in the year.

“This is a measure of the loss of competitiveness, which has resulted in unbalanced growth in recent years. This cannot be sustained in the medium term,” Mr Croughan concluded.