Building boom not the sign of high-value economy

DESPITE the strong growth of the Irish economy, financial analysts are expressing concern that most of the employment being generated is in low productivity sectors such as construction.

A hike in interest rates could turn the miracle economy of the past decade into disastrous freefall, as it is low interest rates that have fuelled our property and construction boom.

Economic growth achieved entirely by employment growth — as is the case with the construction industry — is not sustainable in the long term, and will ultimately lead to loss of competitiveness as infrastructure bottlenecks result in decreased output and inflation. The dependence on construction makes Ireland more comparable to Greece, Spain or any other developing economy rather than a high-value, productivity-driven economy like Finland.