Multinationals might distort figures but loosening rules to let in m ore chefs points to real growth

EMPLOYMENT permit regulations are being loosened to allow in more chefs and skilled animation professionals, in another sign of the economic recovery.

The Government announced it was loosening the employment permit rules to allow in more chefs, a move the hospitality industry has wanted for a number of years, as skills shortages put a sustained recovery at risk.

Welcoming the announcement yesterday, the Irish Hotels Federation noted that more than

60,000 new tourism jobs have been created since 2011 and that the industry is on target to create a further 40,000 tourism jobs by

2021.

The numbers at work are soaring to an all-time high, domestic demand is up, and retail sales and tax revenues are posting healthy gains.

The economy is growing strongly – although not as strongly as the official figures suggest. And if further evidence was needed, yesterday’s GDP announcement showed yet again the distorting effect the multinational sector has on our official growth figures.

The near 8pc provisional GDP figure for 2017 is headlinegrabbing, but it once again overstates the recovery taking place. But drill down into the figures and filter out, as best as one can, the noise from the distorting multinational accounting activities and you can see that the economy is growing at a fairly clipping pace. Analysts estimate the underlying growth rate at about 5pc last year.

OK, it’s not 8pc, but 5pc is welcome, particularly as the forecasts put us settling at a more moderate pace of 3pc a year over the coming years. So what are the signs that the domestic economy

is showing strong recovery?

Firstly, look at the employment figures. Experts say this is one of the best barometers of the health of the economy. Data published on Wednesday showed that employment, in the final months of last year, soared to just 12,000 short of its peak 10 years ago on the eve of the recession.

That makes it likely that the peak will be surpassed in the coming months.

Total domestic demand rose last year by 7.9pc, but even when you strip out the effects of globalisation and the multinational element from that, demand still grew at 3.9pc, the CSO estimates.

Jennifer Banim, assistant director at the CSO, argued that another very important indicator is that personal consumption and expenditure, what people spend on goods and services, is up about 1.9pc.

“Just to draw the whole story together, yesterday we released our labour force statistics and we were looking at labour force statistics and employment growth of just over 3pc,” she said.