Ireland’s overall competitiveness performance remains positive. Our improved fiscal position and increased cost competitiveness have contributed to Ireland’s improved international competitiveness. This improvement is reflected in a range of metrics, notably economic growth, increased employment, falling unemployment and a strong trade performance. Ireland’s inflation figures are particularly encouraging. In 2018, the inflation rate in Ireland was 0.7%, which was the lowest in the euro area, and the joint lowest in the EU.
Notwithstanding this strong position, addressing Ireland’s cost competitiveness remains a key economic priority for Government. We continue to monitor Ireland's cost base and to analyse the factors that are crucial to improving our cost competitiveness.
The Costs of Doing Business in Ireland 2018 report, published by the National Competitiveness Council on 1 June, found that the cost base for enterprise is internationally competitive across a range of metrics, including the cost of starting a business, communications costs and average income taxes. However, the Council also highlighted that Ireland remains a relatively high cost location and cost pressures are evident in residential property, credit, labour and business services.
A range of initiatives are in train across Departments to enhance our cost competitiveness and productivity, improve the ease of doing business, reduce the administrative burden business face and drive greater efficiencies across the enterprise base.
Through the Action Plan for Education and Pathways to Work, the Government is working to ensure the pipeline of talent can meet the demand for labour to reduce labour cost pressure. The ongoing work of the Personal Injuries Commission, the implementation of the report on the cost of motor insurance, and the complementary work of the cost of insurance working group should help to reduce insurance costs for businesses.
Rebuilding Ireland – the Action Plan for Housing and Homelessness - presents a wide-ranging set of commitments to address housing supply and, while many of these will take time, the Government is implementing and driving change.
My Department and the Department of the Taoiseach are also developing Future Jobs Ireland, a cross-government initiative with a strong focus on improving productivity, that will be published shortly. This initiative will propose concrete and ambitious actions to enhance our productivity and competitiveness and will ensure that we are well positioned to adapt to transformational changes the economy will face in the years ahead.