In the past few weeks we have heard a lot of bad news about jobs. Several of the firms affected are indigenous concerns - most notably Aer Lingus, The Irish Times and RT╔. But these are the exceptions. The vast majority of the job losses have been in US multinationals - high-tech firms which have made the major contribution to the growth of employment here in recent years.
Even before the atrocity of September 11th a number of these high-tech industries were already experiencing a fall in demand for their products.
This was the case with the software and computer industries, with those producing electrical machinery and communications equipment, and with the basic chemicals sector, which produces Viagra.
By August last the output of these industries was running one-fifth below the level of the first quarter of the year.
The redundancies now being announced are the delayed consequences of that pre-September fall in demand for these products.
But, outside these areas, in the remaining three-quarters of our manufacturing sector, output in July and August was still well up to the level achieved earlier in the year.
Indeed the output of the food industry was continuing to rise, and even the largely externally-owned medical equipment sector was still recording higher output than at the start of the year.
There was indeed no sign of any recession in the great bulk of our manufacturing sector before last September.
No doubt other sectors of industry will in due course be affected in varying degrees - for we have yet to feel the impact of the events of September upon our economy.
Nevertheless total industrial output had fallen by about 6 per cent before the events of September 11th, and, as the tax returns demonstrate, our economy is now static at best.
In so far as our national output shows any growth in 2001 over the previous year, that will be only because of the carry-over from the boom that reached its peak in the first quarter of the current year.
The recently-published ESRI Quarterly Review recognises these realities.
It admits that its new forecast implies a virtually stagnant economy in the second half of the year. And the commentary says that in 2002 "the economy will slow further", because "the likelihood is that the anticipated recovery in the US economy will be postponed, along with the other major economies, until the middle of 2002".
When allowance is made for the inevitable lag between a recovery in the US and the impact of that event here, the authors of the Quarterly Review seem to me to be optimistic in suggesting that on these assumptions "the economy will have returned to potential output levels by the end of next year", and that it will achieve in 2002 a year-on-year growth rate of 2.6 per cent over the current year. That would seem to imply a remarkably rapid recovery, with a very high growth rate indeed in the second half of next year.
Of course, as Alan Greenspan of the Federal Reserve has admitted, the truth is that nobody knows when a US recovery will start. It could, indeed, come sooner than the middle of next year - or it could come later.
But until we can see evidence that it has begun it would be unwise to assume that a growth rate of 2.6 per cent will be achieved in the course of next year.
All this poses a real difficulty for the Minister for Finance, now in the final weeks of his Budget preparation.
There must be a temptation, especially in an election year, to base the Budget on optimistic revenue assumptions.
But it would be dangerous for him to do so. Nor does he need to take a chance on this, for he is fortunate in having at his disposal a healthy surplus, which he can legitimately run down, even to the point of budgeting for a modest overall deficit in terms of our traditional Budget arithmetic.
As the ESRI quarterly commentary points out, the way in which our Budget figures are prepared excludes from the revenue side both the Social Insurance Fund surplus and the recently introduced contribution to the National Pension Reserve Fund. That means that even if the Budget shows, on the face of it, a deficit of half-a-billion pounds, we would, in fact, still have what is called a "General Government surplus" of £1.5 billion. And it is in terms of this latter figure that we will be judged by external observers from the European Commission, the OECD, and organisations such as the IMF.
What all this means is that while this is no time for a "giveaway" Budget, the Government has the necessary leeway to maintain fully its National Development Plan. The completion of the plan as early as possible is necessary in order to facilitate future growth by eliminating bottlenecks in relation to roads and the provision of public transport, and of services for housing.
The present situation also provides an ideal opportunity for the Government to step up the provision of social housing, which was difficult to achieve during the recent boom. There is now a huge social housing backlog to make up, and for the first time in years there is spare capacity in the construction industry to undertake this work.
There is simply no excuse for inaction in relation to this matter.
The present tight restrictions on the amount local authorities can spend on houses to be acquired for those in need should at once be eased by the Government sufficiently to permit councils to move rapidly to provide for this too-long suppressed demand.
For once, social and economic needs coincide.
gfitzgerald@irish-times.ie