'Policy shift needed' to spread wealth nationally

Tuesday 27 May 2014 18.28
The economic recovery has been felt primarily in the Dublin area and a policy shift is needed to ensure the benefits are spread nationally
The economic recovery has been felt primarily in the Dublin area and a policy shift is needed to ensure the benefits are spread nationally

There needs to be a policy shift at a national level if the economic recovery is to spread beyond the capital, according to the chief economist at Friends First, Jim Power.

In the latest Friends First economic outlook, he points out that the economic recovery has been felt primarily in the Greater Dublin Area while many other areas continue to struggle.

Mr Power says many of the economic fundamentals are pointing in the right direction including retail sales, which are up 5.6%, and employment numbers, which he says are moving in the right direction with 60,900 jobs created in 2013.

He concedes that export figures remain very volatile, with the patent issue having a very significant impact again in March, but food and live animal exports are up more than 10%.

Jim Power says the roots of a real recovery are evident and provided the external environment maintains a modest recovery trajectory, the Irish economy should continue to move in the right direction in a gradual fashion. 

"Risks however continue to exist and vulnerabilities such as sovereign, personal and SME debt could very quickly derail a domestic recovery," he warns.

He welcomed the Government's recently launched Construction 2020 plan, but said it must be accompanied by a significant supply side response.

"Simply increasing demand without matching with supply would be reminiscent of the bad old days," he said.

Mr Power warned of external factors which may pose a threat to economic recovery as well as the overall credit situation which he descried as challenging.