National Competitiveness Council warns growth masks 'serious threats'

The economy’s impressive headline growth figures are masking “serious threats” to the country’s competitiveness, it has been warned.

In its latest annual report, the National Competitiveness Council (NCC) has warned that while Ireland’s economic performance and competitiveness has remained strong in the face of Brexit uncertainty, concerns over the global economy, and international tax changes, the outlook is less positive.

“Ireland is facing a significant competitiveness loss as the economy heats up and prices and living costs rise,” said NCC chairman Peter Clinch.

We are at a critical time in Ireland’s economic development where decisions will determine whether we return to a boom and bust cycle. High growth figures must not lead us to be complacent. The international climate has become more challenging for small open economies, and Ireland has lost ground in the international competitiveness rankings.

"To avoid repeating the mistakes of the past, it is critical that competitiveness and productivity are positioned as a central pillar of Ireland’s economic policy.” he said.

“The overall performance of the economy, and government finances, are dependent on a small number of firms in a small number of sectors. Moreover, the majority of Irish-owned firms export a small number of products to a small number of destinations. The narrow base of enterprises in high value-added sectors, and within sectors, disguises many underperforming firms where productivity growth is stagnant or falling.

“In order to support sustainable jobs, wage rates and public services, the Government must position competitiveness and productivity as central pillars of Ireland’s economic policy. The loss of competitiveness in the run up to the global financial crisis left Ireland particularly vulnerable. That must not happen again,” he said.