Dáil Éireann Debate, Thursday - 3 October 2013
90. Deputy Bernard J. Durkan asked the Minister for Finance the extent by which the economic fundamentals and prospects have altered year on year over each of the past five years to date; and if he will make a statement on the matter. [41769/13]
View answerThe improvements in economic conditions in Ireland over the past five years have been considerable and, although we still have some way to go, the achievements to date should not be forgotten. Having contracted for three successive years from 2008 to 2010, the economy recorded a second successive year of growth in 2012. This recovery has been driven by strong export growth over the period, reflecting, in part, the considerable competitiveness gains achieved in the last number of years. Inflation in Ireland has been below or on par with that of the euro area average for every month since March 2008 and the latest Commission estimates suggests a 22 per cent improvement in unit labour cost relative to the euro area average between 2008 and 2014.
I am however cognisant of the fact that it is improvements in the domestic economy that are of greatest concern for the Irish public. Domestic activity contracted sharply following the bursting of the property bubble, with domestic demand decreasing significantly between 2008 and 2012. This has had severe ramifications for the labour market with the unemployment rate increasing by around 10 percentage points over this period.
However recent indications have been that domestic demand is stabilising and is moving on to a modest recovery path. Personal consumption was up by 0.7 per cent in the second quarter and strong retail sales in the third quarter, along with improving consumer sentiment, bode well for the second half of the year. We have also seen a return to growth in ‘core’ (excluding planes) investment, with both construction and machinery and equipment growing in the quarter. Perhaps most pertinently, employment has now increased in each of the last four quarters, with employment up 1.8 per cent in the second quarter, representing an additional 33,800 jobs over the year. In line with this, the standardised unemployment rate stood at 13.3 per cent in September, having fallen from a peak of 15.1 per cent early last year. While I would again stress that more must be done to tackle the still high level of unemployment, it is clear that we are now moving in the right direction.
