After 10 long years, there are finally more people working on the island of Ireland than there were in 2008. The terms ‘full employment’ and ‘overheating’ have been reinstated into economic discourse and, increasingly, our clients are talking about new investment, expansion, acquiring talent and looking at new markets.
Although growth remains sluggish in Northern Ireland, the overall corporate mood is much more positive than might have been expected, just one year out from Brexit and with little sign of clarity of the final terms of the UK’s exit from the EU.
This reflects the ‘here and now’ of doing business, and the need to make ‘no-regrets’ decisions, regardless of the uncertainty that Brexit, or fears over global trade wars, bring.
Our experiences with our clients over the last 12 months reflect the economic reality. Even in times of rapid growth, there are challenges – it is merely the nature of these that has changed.
In this edition of Economic Eye we take a look at a subset of the competitiveness pressures emerging in Ireland and how firms are responding. We focus particularly on three aspects of competiveness: prices, places and people. These reflect the conversations we have had with our clients in recent months:
- How do I source the talent I need to grow my business?
- Where should I look when I expand my operations?
- What can I expect the price of property, commodities and labour to be?
We review progress on the Brexit journey and compare the economy today to how it looked a decade ago just before the crash.
We look forward to helping our clients focus their energies and investments during what is, undoubtedly, a period of great change across the island of Ireland.
Professor Neil Gibson | Chief Economist, EY Ireland
Michael Hall | Head of Markets, EY Ireland
Chief Economist Neil Gibson previews the new five year economic forecasts for the island, particularly the competitiveness challenges emerging - namely place, price and people. He also reviews progress on Ireland’s uncertain Brexit journey and the need to use scenarios in business planning. Listen now.
Listen to our Summer Economic Eye podcast
Chief Economist Neil Gibson previews the new five year economic forecasts for the island, particularly the competitiveness challenges emerging.
|EY growth forecasts|
The Irish growth rate has been impressive since 2015, even allowing for the complications in the measurement of intangible assets and capital stock which have distorted the headline figures. Breaking down the four components of GDP – consumers, businesses, Government and trade – the underlying strength is clear, with each providing a positive contribution. This is unusual and, typically, all four engines firing is a recipe for overheating.
Fear of overheating has become something of a hot topic in recent months, with both the IMF and the OECD publishing warnings relating to the fast pace of Irish growth.
Both economies have enjoyed impressive labour market performance, and this continues with 74,500 jobs added in the 12 months to Q4 2017 across the island.
The job growth has been something of a surprise in NI where we projected a slowdown, which has yet to materialise. It remains a possibility that the headline GDP numbers do not reflect the underlying condition of the NI economy. A basket of other data, particularly in the labour market statistics (which are generally more reliable at a regional level), do suggest something in the 2% growth range.
Download the full report for forecasts and analysis of Brexit, competitiveness, cities and regions, talent, salaries, inflation and property.