Irish labour costs have been stagnant since 2008, while the rest of the Eurozone has seen growth of over 8%, according to a new report by the trade union-backed Nevin Institute. Wages and Ireland’s International Competitiveness finds that, while private sector wages have been largely stable, Ireland has shown strong export improvement despite a difficult international trading situation.

The report by Rory O’Farrell concludes that Irish wages were not uncompetitive at the end of the boom as many businesses and economists claimed – otherwise it would not have been possible for the country to improve its export position so rapidly without a general fall in wages.

He says increases in nominal unit labour costs, the EU’s main wage-related competitiveness measure, were driven by inflation during the boom. Since 2008, a fall in that measure of labour costs was almost entirely due to a move away from the labour-intensive construction sector.