Which stock should I buy this year?
The Irish stock market may have slumped in 2016, but the gains made by the country’s largest private sector employers were a welcome sight.
As of the end of last month, companies employing 1,000 or more workers had increased by more than 14 per cent in real terms, according to the latest data from the National Institute of Economic and Social Research.
More broadly, the Irish economy was buoyed by strong exports to overseas markets, as well as a robust economy at home.
The country’s growth in 2016 was the strongest since the Great Recession of 2008, with growth averaging 5.2 per cent per year.
A decade ago, the economy contracted by more that 5 per cent, the largest decline in Irish growth since the second world war.
The figures show a recovery in business confidence, with sales and profits surging at a pace faster than inflation and investment boosting employment.
However, with the jobless rate at 7.6 per cent and jobless claims on the rise, the recovery has been slower than anticipated.
As the country struggles to find employment, the share of workers aged between 16 and 64 who are employed has dropped from 15.6 to 13.4 per cent since the start of 2016, while the share aged over 65 who are working fell from 22.6 million to 19.6.
The Irish economy is forecast to expand by 2.5 per cent this year, but analysts say the government will need to do more to bring the economy back to pre-recession levels.
The number of jobs created in the country has also fallen from 5.7 million to 5.3 million since the beginning of 2016.
The government has been unable to fill some of the vacancies it has been trying to fill, with more than 500,000 of those jobs due to be cut by the end-June.
The fall in the number of people employed has also contributed to the rising unemployment rate, with employment at those aged from 16 to 64 down by 4.4 percentage points since the end.
There are more than 11 million job vacancies across the economy, which means that if vacancies continue to rise, there will be more people unemployed by 2020 than there are currently in the labour market.
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