Report targets health and legal services
THE IRISH economy has become more competitive but the country must focus on implementing structural reforms across all sectors especially in the healthcare and legal services, according to the National Competitiveness Council's (NCC) annual "competitiveness scorecard".
Published yesterday, the report is a detailed assessment of Ireland's competitive position compared to peer economies using 127 indicators.
Launching the report, NCC chairman Dr Don Thornhill recommended, "a relentless focus on reform -- including those structural reforms agreed with the EU/ECB/IMF troika."
"Such reforms will encompass policies relating to the labour market, competition policy, taxation, education and skills.
"At the same time, we must ensure that our banking system is appropriately structured to provide an adequate supply of credit for enterprise," he said.
Dr Thornhill said the country needed to pay particular attention to embedding "pro-competitiveness" reforms in sheltered areas such as "healthcare and legal services", where high costs feed through to the sectors of the economy facing international competition.
"Over the course of the economic downturn, many business and professional sectors have shown substantial downward adjustment in prices. Since 2006, however, legal services prices increased by 12pc," the report stated.
The scorecard said significant consolidation had been achieved in the public finances but it warned that stabilisation did not equate to recovery.
It also highlighted the skills mis-match caused by the bursting of the construction bubble, leaving an excess of individuals qualified to work in sectors no longer demanding labour and a shortage equipped to work in growth sectors.
It said the country needed to continue to invest in the rollout of broadband and expressed concern that despite the fact that exports had supported growth to date, Ireland's market share remained at pre-recession levels. It was key to "diversify our export base".
Another area of concern was access to bank loans.
On a positive note, the scorecard showed that the Foreign Direct Investment (FDI), which remains critically important, is amongst the highest in the OECD.
"Rates of return on US overseas investment have decreased in many countries as a result of the global economic difficulties. While the rate of return in Ireland has fallen, it remains the highest within the euro area."
It also showed that Irish productivity levels in GDP terms are above the OECD average.