It was always going to be a slow road back to economic recovery. However the latest economic indicators give cause for some optimism. In particular, the latest data for the jobs market, showing a continued rise in employment, indicate that growth is having an important dividend in terms of the creation of full-time jobs. The unemployment rate, at 10.4 per cent, is still high, but is at least moving in the right direction, with the long-term jobless total also on the decline. The economy fell a long way, very quickly. So while the recovery is now, indeed, under way, we still have far to go and underlying problems, such as household and national debt, will remain a drag for years to come. Building employment levels is one of the key steps forward.
There are a number of parts to the jobs picture. One important element is the attraction of inward investment and the promotion of indigenous enterprise, areas where IDA Ireland and Enterprise Ireland have both recently shown encouraging results. The IDA’s new strategy, published earlier this week, presents a coherent and optimistic view of where new projects can be won over the coming years, although spreading projects to locations outside Dublin is a significant challenge. The attraction of recent projects – notably the Apple investment in Athenry – is encouraging. But as yesterday’s announcement by Cadbury-owner Mondelez of the loss of more than 200 jobs demonstrated, jobs created by foreign direct investment can move elsewhere or disappear altogether. Developing Irish-owned business is also vital and it is the balance between the two which can create real progress.
Higher consumer spending, meanwhile, can start to stabilise jobs in the retail economy, one of the hardest hit during the recession. After years of economic shocks, higher taxes and job losses, it is the feeling of solid ground under their feet which is starting to slowly tempt people to spend a little more and save a little less.
The consumer mood is still fragile, however, and real incomes remain under pressure for many. Growth in retail spending is thus likely to be steady, rather than spectacular. Job growth can continue and perhaps accelerate over the next year, however. The lower euro – which will help exporters – and better growth internationally are positive. The ECB’s programme of quantitative easing should help to keep interest rates down. And there could be further tax relief in the forthcoming budget and for state investment to be boosted.
The Government must continue to work on a range of fronts to build confidence and address specific problems. But it is important to acknowledge progress is being made. Whatever about the often confusing statistics of GDP, GNP and so on, jobs growth is a clear indicator of progress and not one that can be taken for granted.