Ireland's robust economic growth will continue this year despite the domestic and international challenges it faces, according to Goodbody Stockbrokers. The stockbroker's first quarter Health Check is anticipating strong growth in domestic demand - led by consumers and the construction industry - while an expansion in exports will also continue.
The report recognises that there are headwinds facing the Irish economy, but according to Goodbody chief economist Dermot O'Leary, the headwinds are not enough to halt the positive momentum that has built up in recent years.
"If you look at the shorter term indicators Ireland is, again, top of the leaderboard," he said. "We saw last week that the employment numbers again remain very robust, particularly for full time employment. He said that of all the issues relating to the measurement of Irish economic output, the number of jobs being created is the cleanest gauge that we have."
With the country creating around 50,000 jobs a year at the moment, the economist said that this was as sure a sign as any that the economy was moving in the right direction.
As a result, Goodbody is predicting GDP growth of 3.9% this year - which will put Ireland near the top of the table in the European Union once more.
"This marks six consecutive years that we'll be at the top of that leaderboard and that will be a pretty remarkable turnaround after a pretty remarkable downturn post the financial crisis," Dermot O'Leary said.
Goodbody's report points to core domestic demand - and in particular consumer spending and the construction industry - as the key drivers of growth this year as people feel more confident to spend and builders respond to growing demand.
That foundation of growth may make some nervous, given its seeming similarity to pre-crash Ireland, but Mr O'Leary says that the current situation is very different to what came before.
"This is coming from a very different base," he said. "In terms of consumption - consumer spending is being driven by disposable income growth and not by credit and not by a fall in the savings ratio. In terms of construction it's still in recovery, it's still coming from a very low base."
The construction industry is still some way off catering to demand in many areas too, he says, particularly in terms of housing.
While that has created a large number of social issues, Mr O'Leary also warns that the lack of affordable housing is a major economic problem too - and it will put a constraint on future growth potential if not resolved.
"If you look at the situation now we are talking about pretty strong growth in the economy over the 2018 and 2019 period and the level of spending has now gotten back up to where it was in 2007," he said.
"We're staring to see capacity issues emerging in many areas. We're seeing it already on the infrastructure side of things so hopefully the Government will deal with that in their capital investment plan over the next number of weeks.
"Housing is the biggest issue for the economy for the next number of years because it impacts on competitiveness," Mr O'Leary added.
"If we're going to maintain competitiveness we need to sort out the housing problem and, indeed, we need to sort out the situation of shortages in labour as well," he stated.
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