Wages 'set to rise' on the back of economic growth

Employment

“The harsh reality is Ireland does not have the underpinning infrastructure or public service provision necessary to underwrite the economic vision which it has signed up to,” said Neil Gibson, chief economist for EY Ireland

David Chance

Strong economic growth and a buoyant jobs market are set to push wages higher, according to the latest report from consulting firm Ernst & Young (EY).

It said businesses were moving to a more hands-on approach to dealing with the potential fallout from Brexit.

EY increased its growth forecast for the State to 8.2pc this year, when Ireland will again be the fastest-growing economy in Europe, and to 4.4pc in 2019. The strong growth this year will see the State create 70,800 new jobs, driving the country towards full employment and generating strong wage growth which EY forecast would be 3.6pc this year.

While economic data here is heavily skewed by the presence of US companies, the State has seen a series of upgrades in its outlook.

EY said Brexit and the worsening global outlook would both hit Ireland and the country needed more infrastructure investment.

"The harsh reality is Ireland does not have the underpinning infrastructure or public service provision necessary to underwrite the economic vision which it has signed up to," said Neil Gibson, chief economist for EY Ireland.

"This means that spending is required, but accompanied by a continued focus on cost control - which will not be easy in the face of growing salary pressures across the economy," he added.

Finance Minister Paschal Donohoe's recent Budget was criticised by some economists for its lack of ambition on infrastructure.