No full recovery in employment until 2021, says report
Job numbers in Ireland will not recover to their peak until 2021, according to an all-island economic forecast today.
The island economy is in its most severe recession since the Second World War and employment figures in the Republic will not return to their 2007 peak for another 12 years.
The North will have to wait only slightly less time for its similar recovery – 2018 – according to the first all-island forecast by Ernst & Young’s Economic Eye.
“This means for many people and locations the recession will have a generational impact and bring severe economic and social hardship to many,” it said.
The current recession is due to be far worse than the North’s and among the worst in Europe – with a peak decline of 10% GDP from its economic height it will effectively be in depression, it said.
The effect of the downturn on business, society and Government will be more severe than predicted, with an 8.9% economic contraction forecast for the Republic in 2009, a 2.9% contraction in the North and an overall all-island contraction of 7.8%.
In a grim summary of the economic situation, Brendan Lynch, special adviser to the Ernst & Young Economic Eye, said: “The island economy is in the eye of an unprecedented economic storm and collateral damage is severe.
“Though early 2009 looks like being the worst period, recovery will be slow and the storm will leave scars on the economic landscape for years.
“Global competitiveness remains key as it is to business the island must look for recovery as neither consumers or Government are in any position to spend aggressively.”
The forecast adds to the ongoing debate over the role which over-reliance on a ’one dimensional’ economy has had to economic downturn in both regions, and in particular the massive reliance on public sector and construction industries.
The scale of job losses in construction across the island by the end of 2009 was “staggering”, it said, with an estimated 150,000 jobs to be lost in construction across both regions from their peak – with the North accounting for close to one in 15 of the losses.
“This represents a halving of the size of the construction sector in ROI in two years since its peak in 2007. The forecast confirms that at the height of the boom more than one in seven people in the Republic were employed in construction in comparison to just one in 15 in the UK,” said Ernst & Young.
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