Ireland on the road to recovery

will continue to grow as a result of healthy labour supply and high productivity. Nevertheless, growth of 3.75 per cent would be Ireland's slowest economic growth in seventeen years. The years 2000 through 2005 saw average annual growth of 9.4 per cent. Unemployment is currently at a nine-year high of 5.5 per cent. House prices have fallen by a nation-wide average of 8.9 per cent in the last year, undermining consumer confidence. Housebuilding is contracting at a record pace and the weakness of the dollar against the euro is making Irish manufacturing and exports uncompetitive.

Alongside its optimism about Ireland's flexible labour market (read as: low wages and job insecurity) the report states: "Despite current difficulties in building and construction, the economy needs continuing substantial investment in housing and infrastructure over the coming decade." The report found that Irish housing completions remained higher than in other EU nations with over twenty per thousand of population. Spain saw fifteen per thousand while the UK saw under five per thousand. Total housing completions are forecast to average 48,000 annually between 2010 and 2020.

According to the ESRI the economy is undergoing significant structural changes with the importance of construction being eclipsed by business and financial services, which are projected to employ 30 per cent of the workforce by 2025.