'Influx of immigrants will drive economy'
Immigrants will make up one in five of the population by 2020 ensuring the country continues to prosper, a leading think-tank claimed today.
Forecasting sustained economic growth of close to 6% every year for the next 15 years, NCB Stockbrokers said Ireland’s unique population and age structure would drive success.
In their highly optimistic report “2020 Vision: Ireland’s demographic dividend”, NCB insisted around 70,000 migrants would be arriving on our shores every year for the next five years.
This huge influx will play an increasingly important role in the growth of the labour force and demand for housing, the report said, supporting the generation of workers born in the baby-boom years of the 1970s.
NCB said Ireland’s population will grow by 30% to over 5.3 million 2020 and to 6 million by 2050. There will be 1 million immigrants here by 2020, the body said.
The report claimed the number of people aged between 15 and 64, the key group in terms of economic activity, will increase by over 700,000 to 3.5 million in the next 15 years.
Dermot O’Brien, NCB chief economist, warned that the baby-boom generation would set the agenda for business and politics for the next 30 years.
“It [the baby boom generation] is going to be setting the agenda in many ways, business, politics,” he said.
“One issue we are hearing more about is child care – if you are a business person you can’t ignore it and if you are a politician you can’t ignore it. There are opportunities and I suppose difficulties associated with it.”
NCB stated that sustained increase in labour supply will maintain the strong growth which began in the 1990s, and would ensure Ireland’s economic success far outstripped other European economies where populations were stagnant or declining.
The report claimed there was a potential growth rate in GDP of 5.75% up until 2010. Between 2011 and 2015 GDP could cool down to 5%, while looking further ahead to 2020, NCB forecast a slight slowdown in labour supply reducing GDP growth to 4%.
But analysts at NCB confidently predicted that a slowdown in the American economy would not hit Ireland badly. Nor do they think that the loss of major US firms would severely dent the economy.
NCB suggested strong growth in the labour force would keep Ireland ahead of the rest of the EU, regardless of whether multi-nationals decided to cut staff levels, or ultimately pull out.
2020 Vision also claimed consumer demand would be driven by relatively rapid rates of population growth with pensions, mortgages, insurance and other financial products benefiting alongside spending on leisure activities, travel and entertainment.
Housing demand may cool down over the next 15 years, but NCB do not predict a crash in the market. The continued influx of immigrants will keep the market alive with around 65,000 units completed each year.
The number of cars in Ireland will double to 3 million by 2020, the report claimed. While the number of motors in Dublin and neighbouring counties will top 1 million.
Over the longer term to 2050, the population will show distinct ageing. The median age of the population will go up from 33 to 38 by 2020 and to 46 by 2050.
Over 65s will account for 29% of the population or about 1.7 million individuals by 2050 compared with the current figure of 11%.
