Thursday 23 November 2017

Recovery index

Louise McBride and Susan Hayes

The last few weeks may be some of the wettest we've seen this year – but that hasn't put us off our fishing trips. The number of fishing rods sold on the online auction website, eBay, jumped by about 11 per cent over the last month. Even if more of us are fishing to escape the stresses of modern life, this is a good sign. If we can afford to spend money on our pastimes and hobbies, it suggests our disposable income is increasing. More disposable income will lead to greater consumer spending, which is good for our economy.


This week marks the last visit of the Troika on an official basis and the financial markets are giving us their own nod of approval. Our cost of borrowing has declined half a percentage point over the last two months which means that it will cost us less, in terms of interest, to borrow and fill our deficit. We're moving much closer to the end of austerity.


If you strip out motor sales, the Irish retail sector contracted by 0.3 per cent last September when compared to the same month last year. The retail sector is the litmus test of the Irish economy, which is hugely employment centric. Retailers have been hit extremely hard by the decline in consumer credit and the growing propensity of consumers to save rather than spend. As we see more rural shops going out of business, it has both an economically and psychologically negative effect on the prospect of recovery.


Homeowners eager to sell their property will no doubt be excira and delira to see property prices continue to tick upwards. As the number of properties available for sale has fallen by 27 per cent in the last six months, this spike in prices was bound to happen. It's important to remember that a slew of repossessed buy-to-let homes have yet to hit the market. The inflation in prices could be good news for the general economy or a false dawn. Let's wait and see.


It appears that the construction sector has some green shoots that have taken multiple, albeit delicate, roots. The Ulster Bank Construction PMI has risen for the past four months – that is, contracted less each time – but it has yet to stumble into positive expansionary territory. This points to a better future for the beleaguered industry but an abundant market of employment is a while away yet.

Sunday Independent

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