Mr. John McCarthy:

A key point worth emphasising is that while we are all aware of a reasonably strong export performance over the past couple of years and that domestic demand has been very weak given the legacy of the crisis, the charts on view show there is now fairly firm evidence that domestic demand is on a modest recovery. We see a modest improvement in consumption and the chart on view shows this is translating into real tangible improvements in the labour market. I am not getting carried away and, obviously, there is a long way to go, but the employment story is a very good story. Employment in the second quarter was up by 1.8% in year-on-year terms, it is the third consecutive quarter of annual growth and it is broad based across sectors, given the CSO reports on 14 sectors, nine of which had employment growth. The only employment losses were in sectors typically associated with the public sector, so the private demand for employment is moving in the right direction.

Importantly, employment growth was concentrated for the first time since the crisis began in full-time employment. We have seen some modest increases in part-time employment but it is now translating into full-time employment, and so is indicative of an improvement in labour demand. That, in turn, is feeding through into an improvement in the unemployment situation. Unemployment is down by 1.75% since its peak. In the first half of this year the bulk of the decline in unemployment is accounted for by a decline in long-term unemployment - that is, those who are unemployed by over a year - so things are moving in the right direction. I am not getting carried away. Some of it is certainly due to outward migration and so forth but, nonetheless, it is moving in the right direction on the labour market and the employment fronts.

To come back to domestic demand, the next chart shows the household savings rate. Members will know that, since the crisis kicked in, households have ramped up both their rainy day savings - so-called precautionary savings, given the probability of suffering an income shock has increased - but also savings for balance sheet repair. There has been a massive destruction in household net wealth. In Ireland most household wealth is held in the form of housing assets, which have fallen by about 50%. There has been a massive destruction in household net wealth, so households have responded by trying to build up financial assets and reduce financial liabilities, in other words, keeping the savings rate high. Certainly, there is now some evidence that the precautionary element is beginning to ease off as confidence begins to improve. Obviously, the balance sheet repair element is going to be there for the foreseeable future given the high level of public indebtedness.

On wages, to complete the labour market situation, and the time series only begins in 2008, there is no evidence that nominal wage reductions at an aggregate level were a feature of the crisis. Essentially, if we look at the private sector, it pretty much oscillated around €19.50 per hour at an aggregate level right throughout the crisis, and the chart shows it moving around the average for the past four or five years. That pattern has continued into the early part of this year, with very little wage growth and no pressure on that side.

I will hand over to Mr. Enright on the investment front.