Despite the release of challenging GDP figures, the Irish economy shows signs of resilience in its domestic sectors. The multinational sector, however, is experiencing a slowdown as the country prepares for the economic uncertainties of a new US presidency.
Irish economic data is notoriously difficult to interpret at the best of times, and the Gross Domestic Product ( GDP ) figures released yesterday are particularly susceptible to distortion. However, they do suggest a slowdown in growth within the multinational sector. The figures revealed a 1.3 percent decline in GDP during the final quarter of last year compared to the preceding quarter.
While a detailed breakdown of the data is forthcoming, the Central Statistics Office (CSO) attributed the downturn primarily to a decrease in activity within the multinational sector. While there is considerable attention focused on the risks posed by the new US president, data from IDA Ireland indicates that a decline in new job commitments was already underway in the previous year. An economic review published by IBEC this week highlighted that total employment within the multinational sector has remained stagnant for the past two years, following an average annual increase of about 15,000 new jobs since 2014. Multinationals continued production throughout the pandemic, with the pharmaceutical sector experiencing particular prosperity. This was followed by a decline in 2023, after which output from the sector recovered. This so-called contract manufacturing, where goods are processed overseas but counted within Irish GDP data, complicates the analysis.For the full year 2024, GDP is only 0.3 percent higher than the previous year. Some slowdown was anticipated given the rapid pace of growth and investment since the middle of the last decade. Domestic sectors of the economy appear to remain relatively robust. The hope is that they can assume the role of the primary growth engine. However, a challenging period of economic management lies ahead. While the spotlight may be on the US, underlying issues such as a housing crisis and inefficient infrastructure delivery are already evident in their impact on inward investment. Addressing these issues is crucial to underpin future investment. There will be extensive focus on planning for a Trump presidency, but tackling the challenges within Ireland's control remains paramount. Investors have expressed a loss of confidence in Ireland's capacity to deliver in key areas, and decisive action is required to rectify this situation
ECONOMY GDP IRELAND MULTINATIONAL SECTOR US ECONOMY INVESTMENT
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