Consumers still not spending but exports continue to shine
Consumers are continuing to shy away from the shops but exports continue to grow, according to new figures.
Personal and Government expenditure fell 1.9pc, in the first quarter of 2011, according to the latest figures from the Central Statistics Office (CSO).
Net exports grew by over 20pc, or by €1.5bn, quarter-on-quarter but domestic demand fell by 3pc while personal consumption dropped by 2.9pc, according to the most recent quarterly accounts from the Central Statistics Office (CSO).
The figures also show that the value of goods and services produced in the country, including multinationals, grew 1.3pc in the first quarter of 2011 compared with last year but when international firm’s output is excluded, gross national product slipped 4.3pc.
The only areas of growth in the economy are agriculture, forestry, fishing and industry, excluding construction.
However, the services sector declined at a slower rate than in previous quarters.
Economists said the statistics exposed further our two-tier economy with exports growing but consumers not contributing.
However, they added there are some positives.
“The increase in GDP is positive but again the economy is still being driven by exports,” said Alan McQuaid, chief economist with Bloxham Stockbrokers.
Business representative group IBEC added that that despite the growth in exports, consumers are still afraid to part with their cash.
"Despite the stellar export performance and the recovery in investment, overall economic growth remains fairly flat because consumers remain too frightened to spend.,” said chief economist Fergal O’Brien.
“Government must do everything it can to give households clarity on the economic situation and in particular it must clearly spell out as early as possible the likely impact of the budgetary adjustments on household finances.
“ If Irish consumers start spending again a solid period of economic growth could quickly emerge."