Business Irish

Saturday 24 March 2018

Five reasons to see 2012 as the year that marked the end of the worst

IT has been another long year but there are reasons to hope that 2012 will mark the beginning of the end of the crisis that began five years ago.

While the dangers are all too obvious, here are five reasons from travelling around the country that mean I am waving goodbye to 2012 with fondness.

1 Unemployment is falling. The unemployment crisis remains the striking feature of the current recession and we all know it would have reached Spanish proportions if we didn't speak English and migrate in record numbers.

Still, 2012 was the first year since the crisis began that saw the rate change less than one percentage point from the beginning of the year to the end.

While it is true that the number of people in a job continues to decline, surveys such as the purchasing managers' index also suggest that companies are taking people on again.

Some shops are even displaying 'help wanted' signs. News from the Job Bridge scheme is also good, with many firms keeping on interns.

The German Chamber of Commerce Christmas dinner began with an appeal for anybody who knows anybody who speaks German to get in touch; the chamber's members need to fill 2,000 jobs.

2 Retail sales are picking up. The shops in towns and cities across Ireland have looked and felt busier than they have for years.

People are doing more than window shopping; they are cautiously filling bags again. Consumer demand has been dreadful for several years as people acted rationally by repaying debts and saving for a rainy day.

That most economists and politicians were surprised by the collapse in spending only serves to show how out of touch many of them are.

Talk about historic saving ratios and the like was pointless; the situation was completely abnormal.

Indices such as the consumer confidence index and retail sales have been jumping up and down from month-to-month, but the big picture is that things are a little better than they were this time last year.

3 Wages are rising. This is a controversial one because the data is so bad, but Central Statistics Office figures suggest private sector wages rose for the first time in years in 2011. We all know what happened to public sector salaries.

Anecdotal evidence suggests that they continued rising in 2012. Hay Group suggests Greece and Ireland will be the only two countries in the world not to see pay rises next year, but I doubt this is true in Ireland's case.

That won't put money in our pockets as the extra taxes introduced in December's Budget will be far bigger than average pay rises, but it will go some way to reducing the pain for many.

4 House prices have stabilised. Prices are still way too high for my liking, but the level is less important than signs that prices are now stable. If this holds, people will slowly be able to start making plans again.

Despite what the Central Statistics Office says, I believe house prices are rising slightly in South Dublin and, more importantly, there are a large number of transactions.

Almost every crash has begun in the capital and almost every recovery begins there as well. The return of price stability across the country seems to be some way off, but the rest of the country will follow Dublin.

5The troika is here to stay. The Government won't get back into the markets next autumn without some sort of backstop from the troika.

That's good news because this will force the Coalition to stick with the troika's policies, which tend to be far more sensible than most of the policies that come from the Dail.

The poor quality of debate before and after the Budget shows once again that our political system is just not up to the job.

So far, our leaders have dodged reform and prayed that they will be able to resume ordinary service.

The longer the troika are here, the less likely this is to happen and the more likely we are to begin the process of changing this country's economic and political architecture for good.

Indo Business

Business Newsletter

Read the leading stories from the world of Business.

Also in Business