IRISH EXPORTERS face a challenging 2011 due to changes in currency movements, according to employers’ group Ibec.
The warning is contained in Ibec’s latest quarterly economic forecast, which has revised downwards its previous estimates for economic growth next year.
“The currency outlook for 2011 is more challenging than we would have hoped” the report states. “This is likely to subdue somewhat the strong export recovery which we have experienced in 2010.” The recent strengthening of the euro has raised concerns about the state of the export market among euro zone countries.
The Government has consistently stated that a strong export market is key to Ireland’s economic recovery. In its report, Ibec maintains that exports will remain the main source of economic growth for Ireland, pointing out that improved competitiveness and economic recovery by trading partners such as Germany have bolstered the sector.
Ibec’s latest Quarterly Economic Trends publication has also revised downwards its projection for GDP growth for 2011; the 2.3 per cent growth forecast in June has been revised to 2.2 per cent, due to the more aggressive fiscal austerity measures being taken by the Government to address the budget deficit.
Chief economist Fergal O’Brien estimates that the additional fiscal measures over the next four years will have a “dampening” effect of 1.5 per cent to 2.5 per cent on Ireland’s economic growth over the same period.
Separately, a report by DKM Consultants has claimed that employment in the construction sector will fall by a further 50,000 by the end of 2011.
The report, commissioned and funded by the Department of the Environment, Heritage and Local Government, predicts total employment in the construction sector – including those employed directly and indirectly – will hit a floor of 126,000 next year.
This represents approximately one-third of the employment level reached during the peak. The projections are based on the assumption that the Government’s capital allocation over the periods 2010- 2012 will be fully spent.
