Updates from Ibec CEO Danny McCoy

CEO Update: What the Spring Economic Statement tells us about our economic resilience 

Friday, 24 April

The latest CEO Update to Ibec membership from Danny McCoy

Ibec has been very deliberate in leading the debate on economic resilience- specifically regarding supply, energy security, and defence- as these are fundamental to our business model. The recent protests posed a serious threat to Ireland’s infrastructure, quickly escalating a cost issue into a potential supply crisis that left essential workers unable to perform their duties and citizens stranded. Ibec was very clear on this during the Labour Employer and Economic Forum (LEEF) last Friday.

We are pleased that one of the outcomes of LEEF is the establishment of a subgroup to focus on long-term labour market resilience, alongside an intensive dialogue on energy security and affordability. Many aspects of our national resilience have been tested and found wanting recently- an outcome we must avoid as we approach the EU Presidency.

The stark variance in economic outlooks presented in this week’s Government Spring Economic Statement demonstrates the volatility facing Ireland as a result of the conflict in the Middle East. Under a worst-case scenario, average inflation rates could spike to 4.6%. However, a more optimistic outlook projects a potential €9.2 billion surplus- a significant increase from the €5.1 billion forecasted on Budget Day last year. While the Government’s recent €750 million relief package provides immediate support, officials may need to find new ways to better target those most impacted by the energy crisis should it persist. This is likely to inform much of the framing for the next Budget.

While recent energy issues demonstrate our exposure to the global oil market, Ireland’s energy market more generally remains fragile. Irish energy costs are currently among the highest in the OECD, posing a major threat to business viability, investment, and future economic growth. We are particularly concerned by the absence of a decarbonisation agenda in much of the dialogue surrounding recent interventions. To permanently reduce our exposure to fossil fuel volatility, we must scale up capital and operational supports to de-risk business investment in renewable heat technologies, bioenergy, the electrification of transport fleets, and critical energy efficiency upgrades. Ibec is hosting a special webinar this Monday to provide our latest analysis on the energy crisis and its implications for business. I urge you to sign up here if you have not already done so.

Finally, I was honoured to receive the Trinity European Laureate Award yesterday evening. I accepted this award on behalf of my colleagues at Ibec, past and present, who have worked tirelessly to exert significant influence in Europe on the issues that matter most to Irish business.

We continue to drive this agenda of resilience at a European level, including through my role as Chair of the BusinessEurope Security & Defence Taskforce.

Regards,

Danny McCoy

CEO

Ibec