Sectoral Growth and Export Earnings

This chapter analyses the contributions of different sectors to economic growth during the boom, focusing particularly on the contributions of sectors to exports because, in a small and very open economy, export growth makes an essential contribution that drives the rest of the economy. As an essential part of this, it examines the net foreign earnings accruing to the Irish economy after deducting the profit outflows and payments for imported inputs that were associated with each sector’s exports. Most manufacturing sectors looked less important in terms of net foreign earnings than they appeared when seen in terms of exports, while the reverse was true for market services and the food sector. Although export growth weakened substantially after 2000, the composition of exports was changing in a way that allowed the growth of net foreign earnings to remain strong for about the next five years. It was only in the final few years of the boom—2005–2007—that the pace of economic growth was not genuinely sustainable and became dependent on a debt-fuelled property and construction boom.