Economy to get demographic lift - report

Demographic factors will favour further strong growth in the Irish economy up to 2020, according to new research.

The same factors are likely to keep the pressure on demand for housing, according to an analysis of population trends by NCB Stockbrokers.

Ireland will record the highest birth rate, the second-lowest death rate and one of the highest levels of immigration of any EU state over the period 1995-2020, it is forecast.

As a result, Ireland is set to record the biggest relative increase in population over the period. By 2020, the Republic's population is forecast to reach 5.3 million, from just 3.6 million in 1995.

NCB economists say that the 15-64 age group is crucial for the growth prospects of an economy and also has a significant influence on demand. In the EU overall, this age category will grow only marginally up to 2010, and thereafter it will fall. Ireland, however, will record the highest growth - of more than 2 per cent a year - until 2010 and further substantial growth thereafter.

A similar pattern is evident in population trends for the 20-34 age group, with overall EU numbers in decline but Irish figures growing by more than 1 per cent. This means that the number of households formed and the demand for new houses is also likely to increase.

However, education and other government services are likely to come under increasing pressure as the number of young people increases. Ireland is set to have the highest percentage of under-15s in the population by 2010.

In contrast, Ireland will have the lowest proportion of over-65s by the same year.

The dependency ratio, which measures the proportion of under-15s and over-65s relative to the working population, is set to increase after 2010.

The extent to which women are active in the labour force is lower in Ireland than in all but three EU states. With under 76 per cent female participation at work, NCB says that there is considerable scope for further increases to augment growth in the labour force.

The population of the EU, which stands at 455 million, is expected to remain broadly unchanged to 2020, with a small rise in western Europe offset by a decline in the accession countries.