Irish prices drop, but remain too expensive
The cost of doing business in Ireland is falling but remains expensive, as companies continue to pay over the odds for legal fees, property, waste disposal, and broadband, the Republic's National Competitiveness Council (NCC) said.
"Despite progress, Irish costs remain high relative to historic levels, and those in other countries," the group said in a report. "Although prices in Ireland have moderated in the past year . . . key business inputs in Ireland remain relatively expensive," it added.
The NCC noted that prices were also declining elsewhere. Industrial rents tumbled 18% in 2009, but rents remained the third-highest in the 16 countries benchmarked, because rents elsewhere also fell.
The report complained that transport costs were relatively expensive, while the cost of legal services had declined very slowly.
Legal costs were still 18.4% above the average 2006 price at the end of last year, while accountancy costs fell significantly during the same period.
The NCC warned prices could rise again if the economy improves, and called for measures to prevent this happening.
"It is critical that we act now to put in place the structural changes that are required to ensure that prices do not rise again," the report added.
Many recent price falls were due to reduced demand, spare capacity, falling interest rates, and fuel prices, rather than a response to structural changes in the Irish economy, yesterday's report added.