Tuesday 25 October 2016

Economic sentiment soars to its highest level in five years

Published 14/12/2015 | 02:30

Ulster Bank Chief Economist Simon Barry
Ulster Bank Chief Economist Simon Barry

Irish investors are more bullish about the state of the economy than at any time for at least the last five years, as the recovery seems to gather steam.

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According to a new report from RaboDirect, some 93pc of investors are optimistic about the state of the economy. That compares with 89pc in August and just 10pc back in 2010.

The RaboDirect Business Monitor tracks sentiment in the Irish investment community. The report asks how investors view the business environment over the next three months.

While they are positive on the state of the Irish market itself, they are fearful about the future of the world economy.

RaboDirect head of investments Killian Nolan commented: "Continued improvement in the outlook for the Irish economy is reflected in sentiment among Irish investors and views about their personal finances.


"However, investors are significantly less confident about the outlook for world economy on foot of greater uncertainty and a weakening of growth in China. This is having a significant knock-on effect on prospects for growth next year, particularly in emerging markets," he added.

According to the survey, some 85pc of respondents said they were "optimistic about their own financial situation over the next three months". However, against a backdrop of increased uncertainty elsewhere, only 69pc of investors said they were confident in the global economy - down from 73pc in August 2015. Barely half of those who took part in the survey see value in global stocks.

The RaboDirect report came as the latest survey of the construction sector found an industry that is continuing to expand rapidly.

The latest Construction Purchasing Managers' Index from Ulster Bank came in at 55.5 in November.

The index looks at a variety of measures and collates them into a single number.

A figure over 50 shows activity in the sector is growing. A figure under 50 shows it is shrinking.

The November figure was marginally lower than the 56.3 posted in October but still shows healthy growth.

Ulster Bank chief economist for the Republic of Ireland Simon Barry said growth has been solid throughout the construction industry.

"There was a notable acceleration in new business growth, with new orders index picking up to a five-month high," he said.

In Numbers

93pc - Proportion of investors confident in Irish economy

10pc - Proportion of investors confident in economy in 2010

55.5 - Construction PMI rate in November

Irish Independent

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