House prices and congestion ‘warning signs’ for competitiveness
Rapid house price inflation and traffic congestion are the warning signs of a loss of competitiveness that were ignored prior to the economic crisis, the National Competitiveness Council (NCC) has warned.
Ireland is facing a “significant” loss of competitiveness as the economy heats up and prices and living costs rise. Unsustainable growth will ultimately lead to a return to boom and bust, the council said in its latest report.
The severe shortage of available and affordable accommodation is a substantial threat to Ireland’s competitiveness, the Council cautioned. That view echoes those from industry.
The NCC is the Government’s independent advisor on competitiveness in the Irish economy.
Its latest report found Ireland’s overall economic performance and competitiveness position remains strong, but masks significant weaknesses – including over reliance in the indigenous sectors on a small number of firms that export limited products to a small number of destinations.
“The narrow base of enterprises in high-value-added sectors, and within sectors, disguises many underperforming firms where productivity growth is stagnant or falling,” the NCC said.
Chairman of the NCC Professor Peter Clinch said: “The loss of competitiveness in the run up to the global financial crisis left Ireland particularly vulnerable. That must not happen again.’
Costs have been rising here as Ireland faces threats including Brexit – which would damage the Irish economy regardless of the form it takes – as well as changing attitudes to international taxation and a rise in protectionist trade policies.