Ibec’s latest quarterly outlook has noted that traffic congestion, the housing crisis and lack of childcare could impact company expansion plans in Ireland.
Irish business and employer group Ibec has said in its Quarterly Economy Outlook that Ireland’s GDP will grow by 3.1pc in 2020. However, it warned that while the economy has, for several years, experienced strong growth, “significant capacity restraints” in the areas of housing, transport, childcare and more could limit the potential for expansion.
Ibec chief economist Gerard Brady noted that Ireland has recorded seven years of strong and sustainable growth, bolstered by “record levels” of business investment, rising wages, moderate inflation and a “rapid improvement in household balance sheets”. Long-term unemployment has fallen sharply and unemployment more broadly has decreased to 5.2pc, down to pre-2008 levels.
‘The failure to match this rapid growth in the number of people at work with a requisite increase in public infrastructure has given rise to growing congestion and problems in areas like transport, housing and childcare’
– GERARD BRADY
Brady continued, however: “While the outlook is still positive, the pace of growth is likely to be more moderate in the coming years. Feedback from our members indicates businesses are increasingly finding that the tight labour market and under-provision of vital infrastructure is materially impacting on companies’ expansion plans.
“The failure to match this rapid growth in the number of people at work with a requisite increase in public infrastructure has given rise to growing congestion and problems in areas like transport, housing and childcare. In turn, this is making it more difficult to attract and retain the workers needed to meet potential demand.”
Ibec maintains, however, that this could be a good thing. Some of the primary factors that could influence economic growth in the coming years could be within our control, meaning that intelligent public strategy could counteract negative effects.
On the other hand, the “uncertain global economic environment” and escalating trade tensions could also be weighing on business decisions globally, including in Ireland, and is significantly less within Ireland’s control, the report added. The projected 3.1pc growth is contingent on the revised Brexit Withdrawal Agreement as it is, at time of publication, being ratified before the current deadline of January 2020.
“No matter what the outcome, uncertainty is with us to stay,” the report concluded. “Future political developments will inevitably shape any trade deal, but it currently points to a far looser alignment than is currently the case. This brings with it the risk of potentially significant trade and regulatory barriers.”