IRELAND’S LACK of competitiveness is still constraining economic growth and job creation, according to Forfás, the State agency which advises the Government on enterprise policy.

The agency’s 2010 annual report, states Ireland must “relentlessly pursue” cost competitiveness.

“Recent gains in cost competitiveness due to weaker demand and the recession are not yet sufficient to regain international market share,” the report states.

Effective structural change in areas such as energy and utilities, property and business services, can also deliver “enduring competitivess gains”, the agency says.

Launching the annual report, chief executive Martin Shanahan said the issues facing business are not new.

“While progress is being made, and concerted action is being taken, more now needs to be done.”

Although stressing the importance of the export sector to economic growth, Mr Shanahan said recovery in both the exporting and domestic sector would be required to address unemployment.

Forfás received €44.5 million in Oireachtas grants in 2010, according to the annual report, up from €36.5 million the previous year. This increase was due to changes in the way the agency’s pension costs were paid.

Forfás is one of a number of agencies that fall under the remit of the Department of Enterprise, Jobs and Innovation. Its sister agencies are Enterprise Ireland, the IDA and Science Foundation Ireland.

Forfás manages, and provides research to, the National Competitiveness Council, the Advisory Council for Science, Technology and Innovation as well as the Expert Group on Future Skills Needs.