Ireland’s cost competitiveness has begun to slip following years of improvement, according to the National Competitiveness Council.

In its annual report on the country’s competitiveness, the council says a failure to address this issue undermines “all of the hard won progress made to date, puts at risk job creation, and damages living standards”.

The NCC recommends the State “relentlessly pursue” measures to keep the cost of doing business here down, while also ensuring businesses have sufficient access to credit.

The council also calls for a broadening of the country’s business profile, with a need for the development of new sectors and markets.

It also says the unemployment and skills issue needs to be tackled, while the country’s finances must be kept “stable and healthy” to facilitate growth.

The NCC is overall positive about Ireland’s competitiveness, however, noting that the country’s ranking in the IMD World Competitiveness Yearbook improved by nine places to 15th in the past three years.

It also pointed to improvements in the labour market, as well as the growth in Irish exports, as positive indicators of the country’s position.

However this improving economic picture "should not blind" the country to the importance of remaining competitive, according to NCC chairman Don Thornill.

“The economy is now on a much sounder footing for growth than at any stage over the past five years,” he said.

“To reap the benefits of the nascent recovery, we must remain vigorous and alert in our drive to enhance Ireland’s international competitiveness.”