Homegrown firms hit hardest by recession

Irish business has been hit hardest by the country’s recession, official figures revealed today.

While multinationals have managed to increase profits by €1bn, homegrown firms are suffering the most in the downturn with output shrinking further in the summer.

According to the Central Statistics Office (CSO), the Irish economy contracted by 0.6% in the first nine months of the year.

The Quarterly National Accounts showed the value of goods and services produced by home-grown businesses – known as Gross National Product (GDP) – fell by 2% to the end of September.

However, the CSO said the €1bn rise in profits of foreign owned enterprises in the third quarter helped lift the overall economy in the summer, but only marginally, by 0.1%.

Officials warned the small rise was unlikely to continue.

The Government is to publish an economic rescue package later today to drive growth but the Labour Party claimed ministers refused to act after the first warning signs 12 months ago.

Joan Burton, the party’s finance spokeswoman, claimed: “Our dithering do-nothing Government has avoided action for almost an entire year of negative growth.

“Government prevarication has put the country well on the road to a devastating economic depression.”

Measures being proposed in the blueprint for recovery include sweeping tax breaks for entrepreneurs as well as generous incentives for R&D projects and green energy initiatives.

Ulster Bank chief economist Pat McArdle warned strong trading by multinationals had given tumbling figures an artificial boost.

And he said the real state of the economy could be seen through the dropping value of products and services from Irish-owned business.

“That is the best picture of what is going on,” he said.

“The decline is accelerating and we have now had two quarters of negative GNP growth, proof that we are in recession if such was needed.”

Mr McArdle noted the only area of the domestic economy to buck the downward trends had been foreign travel.

“Perhaps it was the depression, but whatever the reason we continued to take foreign holidays with gusto, with such spending up more than 10%,” he said.