The National Competitiveness Council says the Irish economy has performed 'remarkably well' over the past decade, but has pointed to weaknesses in some key areas.
The NCC's annual report says a weaker export performance in the manufacturing sector is being offset by strong growth in domestic areas such as the construction sector. It also warned that household spending was being supported by record levels of private sector borrowing, 'which may not be sustainable in the long run'.
The NCC's annual report uses 171 indicators, and draws on figures from bodies such as the OECD and Eurostat.
The report said Ireland was 'highly competitive' in terms of corporate and personal taxation, while the country also scored well on entrepreneurship, employment and openness to trade and investment.
But the report said Ireland invested less in primary and secondary education than the OECD average, though investment in third level matched the average.
NCC chairman Dr Don Thornhill said 40% of the population aged between 25 and 64 did not have an upper secondary level education.
The report said that while both public and business sector investment in research and development (R&D) had increased substantially in recent years, they were still below the levels in other advanced economies. 'Ireland is also behind other countries in the development of patents and the use of modern technologies,' said the report.
The NCC report said Irish inflation had moved towards the EU average, but price levels were still high compared with other countries. Pay costs rose by 5% between 2003 and 2004, placing Ireland fourth highest of 14 countries.
The NCC said energy and waste costs were growing significantly for businesses, though insurance costs were easing. The report also placed Ireland low in rankings for intensity of local competition and competition legislation.
The council will release another report later this year with more detailed analysis, including policy recommendations.
