We've finally turned a corner, say economists
THE economy has finally turned the corner and positive growth has resumed, according to several prominent economists and one of the country's largest stockbrokers.
Their verdict was delivered even before official figures for the first quarter are released.
Goodbody Stockbrokers said it had "sufficient evidence'' to declare the recession had lifted, even though the CSO has yet to confirm the official figures.
When the official figures finally land the growth will be not be "a flash in the pan'', said Goodbody's chief economist Dermot O'Leary in a new report.
Mr O'Leary was previously forecasting the economy to contract by 1pc this year.
But he declared in yesterday's report: "Recession over, long live recovery."
"Even the consumer is a little more confident,'' he added.
"Over the past two weeks in particular there have been a number of indicators, as well as commentary from Irish corporates, that together indicate growth has re-emerged,'' he explained.
However, Mr O'Leary cautioned that major problems still linger. "We must not get carried away with ourselves, as the challenges that the economy faces have not disappeared, but it is important to recognise that the turning point that we thought would arrive around the middle of the year has already arrived.''
Other economists were in broad agreement with the report, noting that figures measuring sales in shops, industrial production and exports had all been positive lately.
"It's a close call whether we came out of recession in the first quarter or not," said Austin Hughes of KBC Bank. Jim Power, an economist at Friends First, said the recent figures had encouraged him to bring forward his prediction for the resumption of growth.
Mr Power now believes gross domestic product (GDP) began spluttering to life sometime in the first quarter of 2010, following a contraction in the final quarter of last year.
"It would appear that technically GDP in the first quarter was higher than in the last quarter," he said yesterday.
Both economists said that many citizens will continue to suffer even as the economy resumes growth.
"People aren't going to wake up some day soon and say 'gee whizz we're out of recession'," Mr Power said.
"We've been falling out of an aeroplane for a long time. We've hit the ground but its still very painful."
Companies have also been more optimistic lately. Cavan-based Kingspan said yesterday that there was now room for measured optimism. "The sense of nervousness that prevailed in all of the group's markets a year ago is less evident at present," the company told shareholders yesterday in a further sign that the construction sector maybe close to bottom.