IBEC - Newsroom

IBEC, the group that represents Irish business, today said that although the Irish economy contracted at the fastest pace on record in 2009, it will pull out of recession around the middle of 2010 and return to annual growth in 2011.

Commenting on the CSO’s latest National Accounts data, IBEC senior economist Fergal O'Brien said: “Although the economy was still shrinking at a worrying pace towards the end of 2009, we remain confident that it will emerge from recession over the coming months. This is down to improved trading conditions for exporters and a modest recovery in consumer spending.

"The recovery will be fairly muted initially, and it will be 2011 before we see annual growth re-emerge. Many businesses remain under serious pressure and additional Government measures to support enterprise and employment are urgently required.

“The 7.1% drop in GDP and 11.3% fall in GNP last year were largely as we had expected. Unfortunately, there is yet no hard evidence of a turning point for the Irish economy, as output contracted again in the final quarter of 2009. The construction sector remains the largest drag on economic growth, and consumer spending also ended the year in decline.

“The export sector is beginning to benefit from the pick-up in the global economy and services exports in particular are likely to perform strongly during 2010. Ireland's export sector held up reasonably well last year, falling by 2.3% compared with a 12% decline in global trade. Services exports grew by about 1% last year, while merchandise exports fell by 5.4%.

“The National Accounts also highlight the diverging trends faced by the traditional and modern sectors of manufacturing. The modern, predominantly multinational, sector of manufacturing grew in 2009 while the traditional sector, which is more exposed to the currency difficulties associated with the weak sterling, experienced a difficult year.”