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Dan White: Recovery is in sight but it won't be like the good old days

At last, almost two years after the Irish economy entered its worst downturn since the 1930s, there is some light at the end of the tunnel. A modest economic recovery is now likely to begin next year with stronger economic growth kicking in from 2012 onwards.

ESRI research professor John FitzGerald is now predicting vigorous 5pc economic growth between 2012 and 2015, reverting to 3pc annual growth from 2016 onwards.

But will it feel like growth? While any bottoming out in the economy, which has shrunk by up to a sixth over the past two years, is good news, it might not be a good idea to lose the run of ourselves.

Fallen

For a start, unemployment is unlikely to fall rapidly any time soon. At least half of the increase in the numbers of those signing on the live register has come from the construction sector, where the number of jobs has fallen by at least 130,000 since the top of the boom with a further 50,000-60,000 job losses likely before it stabilises.

With the country awash with unsold houses and apartments, empty office blocks, shopping centres and industrial units, and with the new motorway network likely to be substantially complete by the end of this year, construction employment is likely to be permanently lower, with no more than 100,000 workers as against more than 280,000 at the end of 2006.

Finding jobs for all of those ex-building workers, many of whom have relatively low skill levels, will be very difficult.

Not alone will the property bust leave us with a rump of almost 200,000 former building workers looking for jobs, it has also left hundreds of thousands of homeowners stuck in the negative equity trap. This makes the second part of FitzGerald's forecast, that consumers who have been squirreling away cash will start spending again, look more than a little optimistic.

Me, I'm not so sure. Look around you. The country is full of unsold houses and apartments. While there might be a partial recovery inside Dublin's M50 and Cork's M25, that's not where the real problem is.

Ghost

The real problem is the hundreds of thousands of new homes and apartments that were built in the outer commuter belts of our major cities and the ghost estates which seem to haunt every town and village, no matter how remote, in the country.

While this massive overhang of unsold stock overhangs the market any significant recovery in property prices is years, perhaps up to a decade, away.

Far more likely is an export-led economic recovery. The savage wage cuts of the past year are already feeding through into greater international economic competitiveness. Despite the strong euro, the Irish-based multinationals are once again gaining market share in world markets. Unfortunately it's a different story for indigenous exporters as last year's €1bn decline in food and drink exports testifies.

Jobless

What all of this means is that when growth resumes things won't feel like they were back in the "good old days" of the noughties where everyone with a pulse was more or less guaranteed a job and we all had money to spend freely.

A far better parallel is likely to be the so-called "jobless" growth of the late 1980s and early 1990s. In those years, despite apparent strong economic growth, the number of jobless remained stubbornly high and, outside of the multinational enclave, the domestic economy remained chronically depressed.

With most of us still bearing the scars of the bust of 2008-9 what are the odds of something similar happening again?