Bernard Durkan (Kildare North, Fine Gael)
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Question 106: To ask the Tánaiste and Minister for Enterprise, Trade and Employment the degree to which she has carried out an assessment of costs in the private sector in respect of both manufacturing and service; the degree to which such costs have fluctuated in the past 12 months; and if she will make a statement on the matter. [28218/09]

Mary Coughlan (Donegal South West, Fianna Fail)
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The National Competitiveness Council (NCC) regularly produces reports assessing the quality of Ireland's business environment including our relative cost competitiveness.

The recently launched NCC Report 'Getting Fit Again; The Short Term Priorities to Restore Competitiveness' (June 2009) reported that Ireland's current price competitiveness has improved. The recession and the strength of the euro (as imports become cheaper) is resulting in a fall in price levels in Ireland. Inflation fell significantly across most goods and services groups in 2009. Housing and utilities experienced the most dramatic fall from increases of 6.9% p.a. in 2005-2008 to -4.5% in 2009 Q1. We are also witnessing significant falls in house prices and a weakening in wage growth.

The NCC recommend that in the medium term, policies need to facilitate the convergence of Irish costs, charges, professional fees, rents and incomes/ wages towards the levels of our trading partners.

Under the Framework for Economic Renewal we are taking a number of measures across Government to improve our competitiveness. Improving our cost competitiveness is a priority and we are already seeing results as noted by the NCC. We will continue to exert further pressure on costs, including reviewing those recommendations of the Competition Authority which have most effect on competitiveness, particularly in the non-traded sectors. We are working to ease costs to enterprise in administered sectors of the economy under state control such as local authority charges. We are also easing the administrative burden that regulations can create.

With regard to energy costs for businesses, in recent months, the trend of energy prices has been downward with a 10% drop in electricity prices for residents and small and medium enterprises from 1 May, while gas prices have reduced by an average of 12%. These reductions will result in a further easing of cost pressures for businesses.