This Article appeared in the Irish Examiner June 15th 2018

Last week I wrote a pretty upbeat piece on the Irish economy, with a strong focus on ongoing positive trends in two key components of the indigenous economy, namely Tourism and the Agri-Food sectors. Predictably, I got a negative response from certain quarters, with one in particular claiming that it read like ‘a PR piece to encourage inward investment and that as usual there is a certain group in society doing well and feeling positive, but far too many are being left behind again’.
Difficult to know how to respond to that accusation without coming across as callous and cruel. A point to note is that I did not once mention inward investment and my focus was very much on the domestic side of the economy and on the growth that is being experienced in some key domestic components. This is difficult to argue with.
It is a fact that the reality of life in every developed country in the world is that some people will do better than others, due to factors such as educational attainment, social background, the quality of employment, and the willingness to work hard and take risks. Those with higher levels of educational attainment generally tend to get higher quality and better paid jobs, which in turn is often heavily influenced by social background. It is also generally the case that the harder one is willing to work and the more risks one is prepared to take, the better off one will be. I use the term generally, as it is obvious that this is not always the case.
The challenge for policy makers is to ensure that those who do not get the best opportunities to improve themselves, who are unable to work, or who suffer from some other disadvantage are helped to the greatest extent possible. Ireland does this quite well. The country has a very progressive tax system, in the sense that the more one earns, the more one pays in tax. The proceeds of taxation payments are then used to fund a pretty generous and progressive social protection system, and also to fund public services. People can moan forever about the nature of our economy and our society, but the truth is that if we do not have economic growth and if we do not have people in society doing well, the resources to fund social expenditure and public services will not be generated.
I did not and would not argue for one moment that Ireland does not still have many problems, it does. The lack of sufficient housing and under-funded health, education, and law and order immediately spring to mind. It is a fact that having experienced the most significant economic shock in generations back in 2007, there are still significant legacy issues to be addressed, but at least with the strong momentum in the economy, we will be given the opportunity to address those issues. Without growth, very little would be possible.
Thankfully, as I pointed out last week, we are seeing a lot of growth coming through and the latest data releases show clearly that the good news is continuing to pour forth.
This week, the Industrial Development Authority (IDA) suggested that it is having a very strong first half and that the investments already approved so far this year will lead to the creation of over 11,300 jobs, which is marginally ahead of the first half of last year. The IDA is continuing to attract strong overseas interest in its investment proposition, and that is unambiguously good news. Of course, there are challenges and risks involved here, but that is the nature of economic and business life. Managing the risks in a prudent manner is key.
It is not correct to suggest that a rising tide will lift all boats, but a rising tide is still preferable to a falling one. I firmly believe that the best thing that is currently happening in the economy relates to labour market developments. The level of unemployment declined by 15,600 in the 12-month period to May and the unemployment rate has fallen to 5.8 per cent of the labour force. Since the low point of the labour market in January 2012, the number of people unemployed has declined by 217,300 from 356,300 to 139,000. Of course, we can argue with the quality of some of the employment being created, but the trend should be welcomed by any sensible person with an open mind.

This article first appeared in Irish Examiner 8th June 2018

In the midst of some signs of an easing of Eurozone growth so far in 2018, it is interesting to observe that almost all data releases are providing a very upbeat assessment of what is happening in the Irish economy.

In the midst of the economic crisis some years back, there were many prepared to argue that the Irish economy would not emerge from the morass in a generation and, indeed, a number of commentators made a strong media name for themselves by preaching an incredibly negative narrative about Ireland’s prospects.

I never accepted this narrative as I always believed that it is not the nature of the Irish to sit back and accept the apparently inevitable.

However, I have been taken somewhat aback at the speed and magnitude of the economic recovery.

Ireland has certainly defied the conventional view in a very positive manner. It says a lot about the Irish mentality and about the spirit of entrepreneurship that permeates the national psyche. Long may it continue.

In the midst of the crisis, policymakers took some very difficult fiscal policy decisions and a lot of pain was felt by a lot of people.

This obviously helped put the public finances back on track and helped restore international confidence in the economy much more quickly than anybody would have anticipated.

However, I think most importantly, some strong and sensible strategic decisions were taken to ensure that the two most important indigenous sectors — tourism and agri-food — would provide the pathway for the emergence of the economy from a very difficult place.

Indeed, that has turned out to be the case and both sectors have played a key role in driving the economy forward.

In 2017 for example, 9.93 million overseas visitors came to Ireland, which was the highest level in our history.

Data released by the CSO last week showed that the strong tourism performance has continued into this year.

In the first four months of the year, 2.82m overseas visitors came into the country, which is 7.3% ahead of the same period in 2017.

Visitor numbers from Britain are up 1.5% and accounted for 39.7% of total overseas visitor numbers.

The North American market expanded by 13.6%, and visitor numbers from the Rest of Europe increased by 12.3%.

These are incredibly impressive visitor numbers and certainly suggest that just as Bord Bia is doing a superb job promoting the Irish agri-food sector, Tourism Ireland and Fáilte Ireland are doing a superb job promoting Irish tourism.

The recent relative strength of sterling is good news for Ireland, but the more recent strengthening of the dollar is particularly good news.

When the dollar was sliding significantly during 2017, fears about the impact this currency move might have on the attractiveness of the Irish market for US visitors were justified.

On the agri-food side, the uncertainty presented by Brexit is obviously of key concern, but it is good to see that Irish policymakers are taking a very proactive approach to developing new more exotic markets like China and South Korea. The sector is still doing very well.

The great thing about the contribution of tourism and the agri-food sector is that they both have a strong regional and rural footprint, and both have a strong domestic value-added content.

In other words, the inputs into both sectors are very much domestic, both are labour intensive and leakages are not significant.

All in all, Ireland now finds itself in a very strong place and the sense of optimism and enthusiasm is very real and very positive.

Regardless of one’s views on the recent referendum, the sense of enthusiasm and optimism it has generated amongst young people, in particular, is a joy to behold.

Socially, Ireland is now becoming a very progressive and outward looking country and this just serves to feed into the very positive trends on the economic front.

It is good to be Irish at the moment and it would be nice to see an optimistic narrative swamping the negative narrative that has been so prevalent over the past decade.

Ireland is moving forward, and long may it continue.