Analysis: "The Celtic Tiger is back" was the reaction of one of the more upbeat economic commentators to some recent figures on growth and jobs.

However, Intel's announcement is by far the most important piece of positive economic news so far this year.

The recent EU enlargement and the emergence of China as a manufacturing base have raised fears about the Republic's ability to attract multinational investment. Not only are other locations much cheaper but, increasingly, some can undertake skilled production processes. What yesterday's announcement indicates is that track record still matters.

Intel could surely have found a cheaper location to undertake its new wave of investment. However, price isn't everything. The record of the employees and management in Leixlip in adapting to successive new waves of technology was clearly a major plus. Corporation tax here remains low and grant aid will no doubt help.

Importantly, when a stable political environment can often be taken for granted, this may have been an important factor with one of Intel's other major investments being in Israel. Being a small peripheral economy has often been seen as a disadvantage to Ireland, but in troubled geo-political times it may play as a plus.

Intel is the latest - and biggest - in a string of recent announcements which has also included announcements from the likes of Goggle and eBay. The tech sector, on which much of Ireland's recent growth was built, is clearly rebounding after a couple of dreadful years when balance sheets were being repaired after the dotcom collapse.

These announcements indicate that the Republic is attracting some of the next wave of investment, despite intense competition from other locations. And once some of the big names come here, experience suggests that others will follow.

Output growth in the other main plank of the inward investment sector - pharmaceuticals - may have slowed, but the major new Wyeth biotechnology investment will soon move to full production, while many of the other big names have a solid base here.

Many commentators have revised up their forecasts for GNP growth this year to the 3.5 per cent-plus range in the light of recent indicators. The Intel announcement will add to their optimism, though the threat of higher oil prices remains a concern.

Goodbody Stockbrokers calculates that the investment will add a not-insignificant 3 per cent to total investment over the next two years, potentially boosting growth by 0.5 of a percentage point next year.

More important, however, will be the impact on confidence. Business and consumer confidence has picked up steadily in recent months, but the international situation and sluggish euro zone growth have remained a concern.

Intel's announcement will provide a lift for the whole economy and should allow IDA Ireland to attract further investment over the next year or so.

Questions remain about Ireland's competitiveness and the impact of lower-cost locations, but yesterday's announcement provides cause for optimism.

It suggests that we can still build future success on past performance and that we still have competitive advantages in key areas.