SSAI consumer spending expected to create 43,000 jobs
Some 43,000 ‘SSIA jobs’ are to be created as a direct result of an expected consumer flurry over the next year, economists predicted today.
While the state will continue to prosper for the next year-and-a-half, the long-term forecast is more gloomy, however.
The Economic and Social Research Institute (ESRI) stopped just short of saying the current boom was in its death throes but it identified 2008 as a watershed.
Dr Alan Barret, of the independent think-tank, said: “A slow-down is inevitable.”
The economy is expected to grow at more than twice the EU average over the next 18 months, by more than 5% this year and next.
Some 159,000 new jobs will be created, mainly in services, such as finance, health and education, as well as construction, the ESRI quarterly report said.
Of these, it believes around 43,000 ‘SSIA jobs’ will be created from the Government savings plan windfall.
The figures are based on the assumption that people will spend a third of the matured total €166bn saved.
The resultant spree is expected to add around 1% to overall economic growth over the 12 months from May this year.
With the increased need for labour, wages should grow to attract people into new jobs, it is anticipated.
The income growth, of 5.8% and 5.5%, for this year and next year respectively, is in turn expected to encourage more spending.
The ESRI also believe the Government will increase its public spending in advance of the general election, despite ministers playing down the likelihood of such a scenario.
But after the consumer surge created by the SSIA windfall and the forecasted post-election dip in Government spending the economy is set for tougher times.
Indications that profitability is falling suggests employers may begin shedding jobs in 2008. Also, the inevitable end of the construction industry boom continues to loom on the horizon.
Dr Barrett described Ireland’s reliance on the building trade as “off the wall” compared to other economies. “By definition it’s not sustainable,” he said. “There’s a natural end to it, a natural limit.”
