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Ibec warns of the 'sharpest compression of economic activity in living memory'

The business lobbying group forecasts Irish unemployment to level off at 16% and GDP to contract by 11% for the year.

IBEC IS EXPECTING Irish unemployment rates to hit 16% by the end of the year and consumer spending to fall by 14% in a best-case scenario.

The business lobby group has also forecast Irish Gross Domestic Product (GDP) to fall by 11% in 2020 as a result of the pandemic-related economic crisis.

In its quarterly economic outlook, published this morning, Ibec highlights the “stark picture” painted by current unemployment numbers, which stand at around 28% of the workforce.

“Combined numbers on the Live Register and Pandemic Unemployment Payment are now over 800,000, the highest number of people out of work in the history of the state,” the report stated.

However, the lobbying group says that despite the sudden increase in jobless figures in March and April, we are reaching a point “where the dramatic rise in unemployment is levelling off”.

The report estimates that in a best-case scenario, unemployment will fall from over 28% in the second quarter to 16% by the end of the year and to around 7% by the end of 2021. 

The group’s forecast is broadly in line with that of the Economic and Social Research Insititute’s (ESRI), which published its own quarterly outlook last week.

In its best-case scenario — in which there is some recovery towards the end of the year as lockdown measures are gradually eased but public health restrictions, such as social distancing, remain in place — the think-tank said that unemployment rates will level off at 17% by the end of the year.

Echoing the ESRI’s report, Ibec has also highlighted the burden of job losses on young workers. 

“Those unemployed in the wake of COVID-19 are disproportionately younger workers, who represent a high proportion of employees in retail, hospitality and tourism, the sectors worst affected by lockdown measures,” the Ibec report says.

“Experience from the 2008 financial crisis indicates that youth unemployment is particularly intractable and there are likely to be longer-term implications for this cohort as these sectors are also those which face the greatest difficulties in reopening and a return to normal staffing levels in the medium-term.”

Ibec chief economist, Gerard Brady, commenting on the report said, “We are currently living through the sharpest compression of economic activity in living memory. Whilst many of the collapsing economic figures presented in this report are the result of necessary public health decisions, their impacts on incomes and balance sheets are no less real.

“The recent roadmap published by Government gives welcome clarity on when sectors may expect to be allowed re-open again, but it is also clear that normal conditions will not return for some time.”

Separate figures, published by the Department of Finance yesterday, revealed that total government expenditure at the end of May was 19% greater than expected – up by €4.175 billion.

According to the figures, the state’s budget deficit hit €6.1 billion by the end of last month, compared to €63 million recorded in the same period last year, due to high levels of spending on pandemic-related income supports and subsidies.

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    Mute Quiet Goer
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    Jun 4th 2020, 12:20 AM

    Is there any chance we can just skip the whole aftermath thing and pick up where we left off before the virus arrived? Couldn’t stomach another decade of Fianna Gael politicians telling us we need to pay them so much more every year for living in our own houses followed by them giving themselves a pat on the back for all the tough decisions they had to make

    369
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    Mute Paul Cunningham
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    Jun 4th 2020, 1:45 AM

    @Quiet Goer: If the economy is frozen in time, then it would be nice to just write it off since the rest of the world is in the same position and noone wants the consequences. An example of imaginary money that could do with being moved, Dreams

    50
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    Mute Charlie
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    Jun 4th 2020, 2:18 AM

    @Quiet Goer: and don’t forget the yearly pay rises and outlandish expenses

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    Mute 8-Bit-Relic
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    Jun 4th 2020, 4:29 AM

    @Paul Cunningham: The problem is that the economy isn’t frozen as are still there and that you can’t just reset as the borrowed money came from somewhere. Someone will take the hit at the end.

    15
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    Mute Stephen
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    Jun 4th 2020, 6:05 AM

    @Quiet Goer: but you could stomach SF politicians telling us we need to pay them so much more every year for living in our own houses followed by them giving themselves a pat on the back for all the tough decisions they had to make??

    24
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    Mute David Corrigan
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    Jun 4th 2020, 6:29 AM

    @Stephen: SF are not in government. Try and keep up Stephen.

    48
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    Mute Handsome McWonderful
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    Jun 4th 2020, 9:40 AM

    @8-Bit-Relic: I think we all know who is going to be taking the hit.

    9
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    Mute Agenda21
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    Jun 4th 2020, 12:20 AM

    I can’t believe that we have allowed these clowns completely shut the economy down with thousands of businesses going bust and jobs lost, lock us into our own homes for months, disallow human contact and being with loved ones when dying & not allowing funerals, ruining kid schooling when this now appears to be a huge proportion of infected and deaths have been healthcare workers and nursing homes but 93% of HCW’s recovered so the vast majority of deaths were the over 65 year olds. It’s ridiculous, and all while giving themselves a pay rise and pay a bunch of shills to open fake accounts say “they’re playing a blinder” and bail out Larry and mo.. Enough is enough

    267
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    Mute Quiet Goer
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    Jun 4th 2020, 12:26 AM

    @Agenda21: Better than being dead or sick in a hospital bed for at least a month

    135
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    Mute Agenda21
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    Jun 4th 2020, 12:27 AM

    @Agenda21: as if thing weren’t bad enough beforehand

    34
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    Mute mar
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    Jun 4th 2020, 12:41 AM

    @Agenda21: Don’t question anything.Obey.

    46
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    Mute Just Some Guy
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    Jun 4th 2020, 12:53 AM

    @Agenda21:

    Ireland would need another bailout if Sinn Fein got in with all crap they had in their manifesto. They think money grows on trees.

    55
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    Mute Agenda21
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    Jun 4th 2020, 1:25 AM

    @Just Some Guy: haha I made list of examples why it’s FFG who think money grows on trees, a long and ridulously pricey list but the J removed. Your a paid shill

    50
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    Mute GO GREEN
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    Jun 4th 2020, 1:37 AM

    @Agenda21: So you care nothing about the over 65 and the thousands of lives saved.

    40
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    Mute Brian Ó Dálaigh
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    Jun 4th 2020, 1:46 AM

    @GO GREEN: he prefers death. I’m sure if it was his own child or sibling or parent he would also prefer he had a steady income and sacrificed his loved one’s life, too.

    29
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    Mute Paul Cunningham
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    Jun 4th 2020, 1:48 AM

    @Agenda21:I see you didn’t lose anyone close to you due to Cheltenham then. Throw the elderly under the bus brigade here.

    23
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    Mute Agenda21
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    Jun 4th 2020, 1:53 AM

    @GO GREEN: who are you addressing, the government?

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    Mute Agenda21
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    Jun 4th 2020, 1:54 AM

    @Brian Ó Dálaigh: who, simon?

    8
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    Mute Bren
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    Jun 4th 2020, 3:27 AM

    @Agenda21: Maybe the reason you think this way is actually because the lockdown did it’s job. Wow. I know. Mind blown.

    25
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    Mute 8-Bit-Relic
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    Jun 4th 2020, 4:39 AM

    @Bren: Did… long time ago. The virus was announced from public transmission 2 weeks ago and more than 150 cases of last week are linked to meat plants. Add the nursing homes what us left?

    We needed the lockdown but it overstood its welcome. We don’t have anymore something to eliminate. Have the last people with the virus isolated and open up the country.

    I know it’s not trendy to say it these says but a strong economy can pay the bills. We need all the power in the economy before a new case arrives from abroad. Keep the borders closed until the world is sorted and we are good to go.

    14
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    Mute Agenda21
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    Jun 4th 2020, 5:19 AM

    @Paul Cunningham: due to Cheltenham… Are you in all seriousness happy with that comment, I think you forgot a few bits and pieces since the races lol

    12
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    Mute Anthony Ryan Dunne
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    Jun 4th 2020, 9:04 AM

    @Agenda21: they should let the black people matter out on the streets to protest.

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    Mute NotaWarder
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    Jun 4th 2020, 12:32 AM

    And remember that anyone questioned the lockdown was scolded.
    This recession will do far more harm than covid.

    149
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    Mute Quiet Goer
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    Jun 4th 2020, 12:40 AM

    @NotaWarder: Any recession we decide to have will be self inflicted. Remember the whole money changing hands game is a man made invention and ‘we’ are entirely in control of it. If we all decide to go mad spending the day the lockdown is lifted we can skip the recession.

    39
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    Mute Agenda21
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    Jun 4th 2020, 12:57 AM

    @Quiet Goer: that real nonsense right there, people can’t spend what they don’t have. Most were budgeting carefully before this crisis despite the fact we were booming so imagine 6 months time.. Quietly go-er

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    Mute Ian Breathnach
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    Jun 4th 2020, 1:31 AM

    @NotaWarder: Will it? Can you provide any credible evidence to support that statement?

    10
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    Mute Agenda21
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    Jun 4th 2020, 1:36 AM

    @Ian Breathnach: piece off

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    Mute conriel
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    Jun 4th 2020, 1:07 AM

    IBEC predict hard times, just watch what Pascal and his department will do, God love the ordinary private sector worker.

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    Mute Shimo Tbay
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    Jun 4th 2020, 12:28 AM

    Anybody remember we had an election months ago and still don’t have a government. Fresh elections asap. We can’t let these clowns run the country again

    163
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    Mute MickN
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    Jun 4th 2020, 9:36 AM

    @Shimo Tbay: Absolutely, they are already teeing up for Sept election. This merry dance around coalition talks is just time wasting..

    15
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    Mute Michael McGrath
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    Jun 4th 2020, 1:10 AM

    Even when the country was flying IBEC were predicting doom and gloom wages too high blah blah. No word of upper managers salaries and bonuses being too high or company mercs too expensive or company expense accounts and credit cards. Its hard enough to fight for your working terms and conditions with a company without having a govt backed companies union as well to fight and the labour court and LRC hamstrung by FG telling them not to side with workers unions

    68
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    Mute Criostoir Mac Ranghaill
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    Jun 4th 2020, 1:47 AM

    This present highjacked government is run by the headless chickens who were in power during the past number of years at a time when health /housing /homelessness was in a diabolical mess. Now during this epidemic by their inapt handling of the coronavirus crisis they are heading to a more serious situation of inflicting depression on our citizens.

    55
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    Mute Virus-free Turkey
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    Jun 4th 2020, 7:28 AM

    You must stay Locked-down until you are guaranteed immortality. Remain in your homes until nobody dies of anything ever again.

    We must have commands from ‘our betters’ to follow. We must vilify those who ignore those commands.

    Let them take all of your freedoms and joys as long as they can keep you safe.

    37
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    Mute Agenda21
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    Jun 4th 2020, 7:42 AM

    @Virus-free Turkey: class comment. Leo and Co are really enjoying the covid and more recently the US race crisis too cling to the indignity of the capitalism driven agenda of failed flops

    15
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    Mute Thomas Corrigan
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    Jun 4th 2020, 12:43 AM

    Other factors yet to come will see those figures jumping more. Watch

    24
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    Mute Tommy C
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    Jun 4th 2020, 1:35 AM

    This is Fu#cing hillarious. It’s the story of the guy who ate himself to death. Everyone wants change they appeal on their social media except it’s someone else who needs to change not me! I’m not the problem, if people followed me more and liked me more I can change the world, listen to what I say!! The dumbfeckery level on this planet leaves me speechless. And don’t fuc$king listen to what I say! Because you wont

    29
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    Mute Sean Callan
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    Jun 4th 2020, 5:17 AM

    If ibec can’t say something more constructive then say nothing are we not bad enough

    19
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    Mute Agenda21
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    Jun 4th 2020, 5:27 AM

    @Sean Callan: The truth, WE CAN’T HANDLE THE TRUTH

    11
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    Mute Michael Patrick Newell
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    Jun 4th 2020, 9:48 AM

    Ah IBEC, the most positive bunch no matter the circumstances, this is a group that cares little about the worker and the country in general and more about the profit margins for their members and whether they can upgrade the merc or bmw this year…….

    15
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    Mute Ian Breathnach
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    Jun 4th 2020, 1:30 AM

    IBEC should find a big fkin hole and crawl into it.

    40
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    Mute Agenda21
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    Jun 4th 2020, 3:23 AM

    @Ian Breathnach: they can’t, they’re already after crawling up the governments hole

    42
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    Mute Michael McGrath
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    Jun 4th 2020, 3:33 AM

    @Agenda21: Correction the govt have crawled up IBECs hole, for years they have sided with everything IBEC wanted.

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    Mute Derek Poutch
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    Jun 4th 2020, 5:48 AM

    @Ian Breathnach: And bring the Esri with them.

    10
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    Mute cryptodon
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    Jun 4th 2020, 7:44 AM

    Just put your money in the stock market, that’s being pumping like crazy, don’t need to work. Do what the rich do.

    6
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    Mute Agenda21
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    Jun 4th 2020, 7:48 AM

    @cryptodon: are you from oirland loike?

    8
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