Despite the Republic of Ireland economy maintaining a respectable growth rate of 4.3 percent, figures for 2002 closed with the highest number of layoffs in over a decade. Published data from the Department of Enterprise, Trade and Employment reveal that almost 25,000 people lost full-time jobs, the highest number since the mid-1980s.
Gloomy predictions from the Economic Social Research Institute forecast unemployment levels reaching five percent for 2003. Industrial Development Authority (IDA) spokesman Colm Donlon reported that the IT sector has taken a heavy knock. “The information technology sector is still in the doldrums worldwide,” he said. “But we are beginning to see signs of brightness on the horizon for the computer and network side.”
One of the most positive developments was Intel’s decision to go ahead with a $1.5 billion microchip fabrication plant in Leixlip, just outside Dublin. The mammoth project had been postponed but with plans given a green light the plant is expected to go into operation by the end of this year. Another boost was the decision of the MBNA credit card company to locate its European customer call center in Carrickon-Shannon, Co. Leitrim, creating an estimated 800 jobs.
Even with such outstanding success stories the Economic and Social Research Institute (ESRI) and Central Bank are revising downwards their predictions for economic growth in 2003. Housing prices rose by 13 percent through 2002. With inflation projected at 5.1 percent there is widespread fear that difficult wage negotiations could lead to industrial unrest, particularly in the first half of the year.
“We have had a poor inflation performance since 1999 and there is no sign that things are getting better,” noted Dr. Michael Casey, assistant director-general of the Central Bank. “We must now talk about restoring competitiveness rather than trying to maintain it. The increase in costs has been well ahead for a long number of years,” he added, describing it as “a stark story.” ♦