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Economy set to grow again as consumer sentiment rises


THE economy is set to grow again this year, business leaders have forecast.

Ibec, which represents employers, said the cheaper cost of living and the drop in the value of the euro was helping Ireland.

As a result, the economy would continue to expand but only slightly, according to Fergal O'Brien, Ibec chief economist.

"Following a return to economic growth in 2011 for the first time in four years, the economy will grow by 1% this year," he said.

"International trading conditions remain difficult, but exporters continue to benefit from competitiveness improvements and the weaker euro has helped exports to non-eurozone countries."

Mr O'Brien said businesses would spend 10pc more this year on new equipment and machinery than last year.

This was down to Ireland's strong export performance as well as new investment from overseas.

"The jobs outlook has also improved over recent months and the export recovery has meant that job creation has exceeded job losses for the first time since 2007," added Mr O'Brien, in Ibec's latest economic outlook report.

Meanwhile, consumer sentiment rose for the fourth month in a row in April.

The KBC Bank Ireland/ESRI consumer sentiment index rose to 62.5 in April from 60.6 in March as consumers were less nervous about their economic prospects.

The April gain marked the first time there has been a sequence of four monthly gains in a row since January 2007.

''We remain a considerable distance from conditions in which a ''feel good factor'' might emerge but, in a still very uncertain world, a continuing easing in nervousness among Irish consumers is probably about as much as could reasonably be expected and should begin to underpin domestic spending,'' said Austin Hughes, chief economist at KBC.