Brian Lenihan Jnr (Dublin West, Fianna Fail)

The Central Statistics Office published national accounts data for the second quarter of 2009 at the end of September. These data show that gross domestic product and gross national product fell at an annual rate of 7.4% and 11.6%, respectively, in the second quarter of this year. Combined with the first quarter data, the figures show the annual rate of decline in the first half of the year was 8.4% in gross domestic product terms and 12.4% in gross national product terms.

The sharp declines in housing output and in personal spending were the main reasons for the contraction in the second quarter. While these results are poor, one positive feature of the data is that the rate of export decline was not as large as that in many other export-oriented economies.

Data which have been published since then suggest the rate of contraction has slowed in the intervening period. As a result, I am advised the forecast for a gross domestic product contraction of 7.75% this year, contained in the April supplementary budget remains broadly valid. My Department will publish in mid-November the pre-budget outlook which will update the macro-economic outlook.

Regarding labour market developments, the latest quarterly national household survey from the Central Statistics Office shows an annual employment fall of 8.2% in the year to the second quarter of this year. On a sectoral basis, the sharpest falls were in the construction, followed at some distance by the retail sector and then at another considerable distance, the manufacturing sector.

In April, my Department projected that employment would fall by 7.8% for this year as a whole. The data which have subsequently been published are in line with this. So while we are seeing a sharp fall in employment, which is clearly a concern, it is not unexpected.

There are a substantial number of measures in place to support the unemployed. The Government is devoting substantial resources to training and up-skilling so that those losing their jobs in declining sectors can gain future employment in expanding sectors of the economy. The number of places for the unemployed in training, education and other support programmes has doubled this year.

The Government is also implementing measures to benefit from the global recovery when it eventually takes hold. The most important of these short-term measures include restoring confidence to our banking system and stabilising the public finances. Also, from a medium and long-term perspective our future pattern of growth will, by necessity, be predicated on a more sustainable export-led economic model. This will require a continued focus on improving our competitiveness.

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