An independent advisory council has warned that Ireland's competitiveness rankings are in decline, as international economic storm clouds gather.
The National Competitiveness Council (NCC) has published its annual report, which outlines the main competitiveness challenges facing the Irish economy.
It finds that - despite the turbulence of the Brexit negotiations, a less favourable outlook for the global economy, the hardening global attitudes towards international trade and the evolving international taxation landscape - Ireland's overall economic performance and competitiveness position remains strong.
It says Ireland has recorded fast growth rates, and unemployment continues to decline as the number of people in jobs approaches a record high.
However, it also warns that the outlook is less positive.
The NCC says: "On closer inspection, there have been some very concerning developments this year, recognised internationally through Ireland's fall in the major global competitiveness rankings."
File photo
On Brexit, it says: "The uncertainty associated with Brexit, and the implications in all areas of economic activity, including potential tariff and non-tariff barriers, delays associated with deterioration in landbridge traffic, lack of adequate port capacity, security of energy supply, among many others, require urgent action to help enterprise to adapt to the shift in the UK trading and regulatory environment."
It also says the country needs to "narrow the productivity gap" that exists between the most productive firms and the 'followers' for sustainable growth for indigenous firms.
On the issue of housing, it says: "The severe shortage of available and affordable accommodation is a substantial threat to Ireland's competitiveness.
"While the council acknowledges the measures introduced over the last few years to address this challenge, the problem continues to grow, and it undermines our economic development and potential.
"Fixing this structural vulnerability is not easy and will take time."
And in acquisition of talent, it says although Ireland is ranked 5th in the world in the IMD World Competitiveness Yearbook 2018 in terms of attracting and retaining talent, "increasing demand and chronic under-investment in the higher education sector is endangering our competitiveness performance."
"This is illustrated by the fact that not a single Irish third-level institution has been ranked in the top 100 in the latest international university rankings for 2018."
File photo
Speaking at the launch of the report, NCC chariman Professor Peter Clinch says: "Headline economic conditions continue to improve, and Ireland remains a competitive economy.
"However, against the backdrop of a less favourable international economic climate, a closer look at the statistics reveals fragilities in the economy.
"Ireland is facing a significant competitiveness loss as the economy heats up and prices and living costs rise.
"The overall performance of the economy, and Government finances, are dependent on a small number of firms in a small number of sectors.
"Moreover, the majority of Irish-owned firms export a small number of products to a small number of destinations.
"The narrow base of enterprises in high value-added sectors, and within sectors, disguises many underperforming firms where productivity growth is stagnant or falling.
"In order to support sustainable jobs, wage rates and public services, the Government must position competitiveness and productivity as central pillars of Ireland's economic policy.
"The loss of competitiveness in the run up to the global financial crisis left Ireland particularly vulnerable. That must not happen again."
"We are at a critical time in Ireland's economic development where decisions will determine whether we return to a boom and bust cycle.
"High growth figures must not lead us to be complacent. The international climate has become more challenging for small open economies, and Ireland has lost ground in the international competitiveness rankings."
