Bernard Durkan (Kildare North, Fine Gael)
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81. To ask the Minister for Finance the extent to which all sectors have contributed to economic recovery; and if he will make a statement on the matter. [20035/16]

Michael Noonan (Limerick City, Fine Gael)
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I am greatly encouraged by the latest data showing that the economic recovery is now firmly established with growth of 7.8 per cent recorded in 2015, the fastest rate in Europe.

Importantly, the expansion in economic activity, initially led by the exporting sectors, is now more broadly based with growth now increasingly driven by domestic factors. Domestic demand made a strong positive contribution to growth in 2015 with consumer spending increasing by 3.5 per cent and investment, boosted by intellectual property assets, up by 28 per cent. Domestic demand looks set to make a strong contribution once more this year.

Domestic demand is supported by the continuing broad based recovery of the labour market. Employment grew by 2.4 per cent over the year to the first quarter of 2016, equivalent to an increase of almost 47,000 jobs with gains recorded in 12 of the 14 sectors reported by the CSO. The unemployment rate remained unchanged in June at 7.8 per cent, seasonally adjusted, down from 9.4 per cent per cent a year earlier. This is still the lowest rate of unemployment since December 2008.

The volume of retail sales increased by 8.1 per cent year-on-year in May 2016. Core sales (excluding motor trades) were up by 6.5 per cent over the same period. New cars licensed for the first time were up almost 25 per cent to end-May year-on-year. Expansion in the construction sector continued in May with the Purchasing Managers' Index for the sector recording its thirty-third successive month of expansion.

Meanwhile, the external sector remains strong with exports increasing by 13.8 per cent in 2015. While this was mainly driven by the modern sectors, it is important to note that the more traditional, labour intensive, sectors have also shown strong growth. However, recent data indicates there has been a slowdown in merchandise trade with annual growth of 2.2 per cent recorded to end April compared with growth of over 20 per cent in 2015.

As well as monitoring the overall performance of the economy, my Department also monitors individual sectors continuously. Government policy will continue to monitor for, and to guard against, the build-up of sectoral imbalances and to avoid over-dependence on a single sector, as was previously the case with Ireland's construction sector.

While growth remains strong, we need to be cognisant of the impact of the recent UK vote to leave the EU. We know that this decision will have an adverse impact on the growth outlook. Our initial estimate, based on the assessment in the Summer Economic Statement, is that growth in 2017 will be 0.5% lower than previously expected.

The Department of Finance will prepare a full macroeconomic projection in advance of Budget 2017 in October and this will include updated estimates of economic growth and the public finances, taking account of developments up to that time, including the UK decision.