Friday 24 November 2017

Recovery index

Nick Webb and Susan Hayes

Good news: The monthly services index increased by an impressive 2.5 per cent on an annual basis, which effectively means that our non-financial traded services sector is producing more.

This indicator has been helped by the fact that our services exports have been growing steadily since 2009. Irrespective of the geography of the customer, this is a good sign for the economy as more inputs, people and resources will be required to deliver upon the demand.

Bad news: Personal Consumption

Ireland is a very open economy and our exports colour our economic growth figures hugely. However, there is no mistaking what the "personal consumption" or spending behaviour of the domestic population is telling us. While it rose at the end of last year, it fell again by 1.1 per cent and 1.3 per cent respectively during the first two quarters of the year. As a nation, we lack the economic confidence to spend and this has a dramatic knock-on effect and particularly in the employment-centric retail sector.

Good news: Change in employment

The most promising sign of a recovery is the fact that there are an extra 33,800 people at work in comparison to a year ago. This is a growth of 1.8 per cent of the total number employed and it has to be noted that many of these new jobs are part-time positions. Even so, this income stream strengthens the household budget, puts skills into practice, boosts confidence and self-generates new employment for others due to the extra money making its way into the wide economy.

Good news: Working week

The average working week increased by 0.3 per cent to 31.6 hours and this points out two positive elements within the Irish economy. Firstly, employers must be getting more orders, such that they require extra labour. Secondly, employees are potentially making more money through working more hours. An employment crisis resolves as there are more people at work, working more hours and eventually at higher wages. This development should be seen as a movement towards, as opposed to away from, a recovery.

Good news: Shoe prices

Sales of shoes , especially women's footwear, are watched very closely as a sign of the future direction of the economy. Women don't splash out on shoes if they think that the economy is going to go pearshaped again. Latest figures show that shoe prices rose 1.3 per cent last month, which may indicate a firmer market. This reverses a trend where shoe prices have fallen by 6.2 per cent over the last year.

Sunday Independent

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