Mr. Seamus Coffey:

We would agree with a certain number of the views expressed about the level of overheating of the economy. First, we need an increase in housing output. That is no doubt necessary, but is there space in the economy to do it? The unemployment rate has fallen to 5.3%. In construction and professions and skills related to construction there appear to be shortages. People have either left the country or left the industry and will not come back to it. It looks like housing output this year will be 18,000 or 19,000, again below most estimates of the equilibrium level for Ireland, which seems to be approximately 30,000 or 35,000, and that would cover only the houses we need annually. We have almost a decade of a deficit to meet so we need housing output to rise significantly above 30,000. This could happen but only if, as would be hoped, we rise temporarily to 50,000 to meet the 30,000 we need and cover some of the deficit that has built up in recent years. This could be a temporary or unsustainable level of output. Housing is very tax-rich, so this could have an impact on the public finances and lead to a temporary increase in demand in the economy. Our concern would be that an attempt be made to avoid such overheating pressures. Have the houses been built? We all recognise that more houses need to be built but, again, one cannot do everything. If it is necessary to take some money out of the economy to make the resource space, to provide the resources for this housing construction, we should be aware of what is happening and take some heat out of the economy if necessary.