Munster economy 'will take a lot longer' to recover than Dublin, says economist
The Munster economy will take a lot longer to recover from the Covid-19 jobs jobs slump even as a return to work gets underway for builders and some retail stores this week, a leading economist has warned.
Jim Power said that the return to work starting with 148,000 jobs that were employed in construction before the crisis was the "great prize" and would likely lead to a relatively swift fall in builders availing of the €350 a week Covid-19 payment in the coming weeks.
Nonetheless, the back to work will show up the regional imbalances across the State between the Dublin and the east coast economy and everywhere else, Mr Power said, as non-grocery retail will take much longer and large store owners will likely seek to tap the Government's wage-support scheme even as their workers leave the €350 a week payment.
Economic recovery in Munster would likely be held back because tourism and hospitality play a more commanding role in the province than in the Dublin region, he said.
“We will see in Munster that the improvement will take a lot longer than in Dublin or the east coast for example because there is much more of an economic dependency on tourism and hospitality,” Mr Power said.
“Look at County Clare, look at County Kerry, and County Cork where tourism is an incredibly important part of the economy -- and tourism is going to take a long time to get back,” he said.
Meanwhile, new government figures show that at the end of last week more people were depending on their wages backed by the Government's wage-support scheme even as the number on the €350 a week pandemic payment has fallen.
The numbers suggest that businesses that were hanging on as their cash dwindled have had to resort to the wage-support scheme.
The number of people on the €350 a week payment fell by 5,000 in the week to 585,000, while the number on the wage-support scheme rose by 7,800 to 464,000 in the week, according to figures from the Department of Employment Affairs and Social Protection.
Including people on April’s official unemployment count, the figures mean that 1.26 million, or 66% of the entire private sector, are receiving some sort of Covid-19 or unemployment payment.
Citing garden centres, Mr Power said that many employers will likely seek out the wage-support schemes for the first time because their business volumes will be disrupted for some time.
"It’s the first day we have really seen an opening parts of the economy and we will see a significant decline in the Covid-19 payment," Mr Power said. "On the wage-support side, it is definitely a sign that businesses that had been hanging on will be more difficult and that will continue to be the key issue until businesses fully reopen."
