AIB's stockbroking arm, Goodbody, has added its voice to the calls for restraint in pay increases, stating pay rises of 4.5 per cent rather than 7 per cent are realistic in the current economic climate.
The chief economist with Goodbody Stockbrokers, Mr Colin Hunt, said that headline pay increases in any new national wage agreement should not further erode the economy's competitiveness.
This week the Irish Bank Officials Association (IBOA) said it was seeking a 7 per cent pay rise in the first of a series of claims to be lodged in the absence of a national pay deal.
Mr Hunt said that a 7 per cent pay increase was too high, particularly given the euro's current strength and the pressure it was putting on the Irish business sector.
"A pay rise of around 4.5 per cent would be more realistic for the economy as a whole," he said yesterday.
The IBOA has indicated that higher increases, of up to 10 per cent, will be demanded for lower paid workers in the banking and financial services sector.
He remains broadly optimistic about the prospects for the economy, nonetheless forecasting economic growth of 3.7 per cent this year, significantly ahead of Central Bank forecasts of 3 per cent.
The brokers are recommending five companies it believes offer good growth potential for its clients.
It has selected Ryanair, Galen, Anglo Irish Bank, IAWS and Paddy Power.
It is particularly bullish about Ryanair's prospects, suggesting it has the potential to win up to 50 per cent of Europe's low-fare market by 2007.
This would equate to around 42 million passengers and would be ahead of the budget airline's own forecast of 40 million passengers by 2010.
Goodbody has said that all of the five companies are run by capable management teams that have track records in identifying and exploiting opportunities in a timely fashion.
Some of these stocks are currently trading on relatively cheap ratings, compared with their peers.
For investors seeking longer-term value stocks, the broker is recommending Bank of Ireland, Irish Life, CRH, Viridian and Grafton.
