the global economic cycle or by developments in global financial conditions for example. this is evident in the data. the irish macrofinancial environment has been more volatile than its european peers in the past. cross - country volatility of a range of macrofinancial variables since 1980 – including house prices, gdp, household income, employment, and credit, for example – illustrates this. 4 in summary, there are big benefits for ireland being a highly globalised economy. but these benefits also bring risks. and the risks need to be managed appropriately. turning to home, a range of indicators we monitor and analyse show that the economy grew robustly in 2018. the strength of activity has been supported by strong growth in employment. this has, in turn, stimulated incomes and supported consumer spending. we have also seen an acceleration of investment in the economy, for example in building and construction. taking a slightly longer - term perspective, the strong recovery since 2013 has yielded several 2 / 8 bis central bankers'speeches important benefits. one of the most clearly tangible places we can all see this, is in the number of people in work. nearly 420, 000 additional people have found employment since the low point of 2012. nearly 2. 3 million people are currently in employment, exceeding the peak of 2007. crucially, growth in employment has been broad based across different sectors of the economy. for example, construction employment accounted for 1 in 9 jobs in 2007. today, it makes up just 1 in every 16. the improvement in labour market conditions has also been felt across different regions. we ’ ve also seen the overall size of the labour force grow. more people, particularly older people, are participating in the work force. net inward migration has also resumed. in the year to april 2018, it amounted to 34, 000 people. this is equivalent to 1. 4 per cent of the labour force. this is a clear signal of the strength of domestic economic activity. looking ahead, our central forecasts assume that the uk parliament will ratify a withdrawal agreement and that a transition period will come into effect until the end of 2020. based on this key assumption, the outlook for the irish economy over the coming years remains broadly positive. however, we expect that a tightening of conditions in the labour market and bottlenecks in the housing market will contribute to a moderation in growth. this moderation also reflects the less favourable international economic environment i discussed earlier, with prospects for growth in our main trading

the wage price spirals of the 1970s and 1980s resulted in high unemployment and emigration. in addition, this trend could worsen the impact of an external shock to the economy, such as a sharp depreciation of sterling against the euro or a sharp fall in the us stock market. private sector credit is now rising at a rate of 25 % year - on - year. the overall stock of credit has been rising to the point where it is now roughly at the european average. this growth reflects confidence in the economy, strong growth and low interest rates. residential and commercial property prices have accelerated at an alarming rate. property prices, as a percentage of disposable income, are now at historically high levels. in the context of the concern about housing costs, there have been calls for restrictions on credit growth. there is no authority to impose restrictions as we might wish. the central bank contribution is to ensure that the lending institutions have made good provisions for the rainy day. in the past year the bank has put emphasis on stress testing and we have advised the banks repeatedly to pay strict attention to risk management. we remain uneasy about the continuing upward spiral in property prices ; apart from other considerations, this generates an inflation mentality. the recent initiatives on housing taken by government are to be welcomed. i said earlier that the present rate of growth cannot be sustained. the central bank estimates that the economy could, however, sustain a growth rate of the order of 4a½ - 5 %, which is impressive by any standard. it may be feasible to maintain exceptional growth for quite some time ahead through importing labour. in view of the existing congestion levels in urban centres and the acceleration in accommodation costs, it is questionable whether our infrastructure can cope with this. besides, the longer the surge in growth, the greater the downside risks. a slowdown is inevitable in time. this can - and i expect that it will be - achieved in a smooth and orderly manner, provided there is wage and price restraint. a smooth transition will require careful management ; it may involve some erosion of our competitive position vis - a - vis our main trading partners and the objective must be to minimise this. the irish economy is one of the most open economies in the world. last year, total trade - total exports and imports of goods and services - amounted to around 160 % of gdp and this figure is expected to rise this year. expressed as a percentage of gnp, this figure would be even higher. because