Government bond yield
It's a momentous week in Ireland as we exit the bailout after a three-year unprecedented period in Irish economic history.
The bond market is participating in the "feelgood cheer" with a cost of government borrowing as low as 3.45 per cent, which is another decline of 0.2 per cent in the past fortnight. This has a direct impact on our pockets as the less that we need to repay in interest on future borrowings, the less that we need to dip into taxpayer funds to manage the day-to-day running of the country.
The number of food companies being set up in Ireland has risen by 5 per cent since the downturn started in 2008. Given that restaurants and cafes are highly dependent on discretionary spending and indeed consumer confidence, it either means that there are a lot of crazy people with bad business plans or else a bunch of smart new entrepreneurs who think the market is turning towards a sustainable recovery. We like the second.
Since the very origins of this Index, we have pointed out the decline in the volume of properties available for rent which pointed us to surmise that rental prices would rise. For Q3 2013, the ESRI Rental Index highlighted a 6.4 per cent increase in Dublin and a lower, though still positive, 1.4 per cent rise outside the capital. This is welcome news for landlords and the Exchequer as both are set to benefit from higher revenues. There is a knock-on effect through a higher rental yield on properties, which acts as a key influencer driving property prices up.
The first recruitment of gardai in five years started last week. That's an incredible statistic. According to the Morgan McKinley Irish Employment Monitor, there has been a rise of 6 per cent in the number of professional employment opportunities available since last year. The number of people in work, the amount of hours they're paid for and the level of their wages are the three key drivers of a true, sustainable and utterly tangible upturn. We need to see the employment market strengthen and stabilise in the coming months to build on this momentum.
The personal demand and consumption of the Irish domestic economy has been the stickiest indicator, the one most difficult to turn and has an immense impact on employment. The Consumer Sentiment Index has now witnessed its seventh consecutive monthly increase at the current expansionary level at 71.0. This is a leading indicator which articulates that Irish people are expecting better economic times in their households, communities and the country at large. If this comes to pass, in combination with stronger employment data, we're on the cusp of that elusive recovery.