Business Personal Finance

Tuesday 23 July 2019

recovery index

Louise McBride and Susan Hayes

Perhaps it's because Christmas is only 13 weeks away, or maybe the baby boom has just brought out the inner child in us all, but sales of action figures on eBay were up about 7 per cent over the last month. This is good news because it shows we still have a bit of disposable income to spend on miniature Buzz Lightyears and R2-D2s.


The days of wolf whistles and unsightly cracks could be about to make a comeback. Though coming off an extremely low base, the building and construction index is up about 12 per cent over the last year. Given the dearth of employment opportunities in this highly labour-centric industry, if demand increases for new buildings, there are lots of under-utilised skills that would benefit from a pick-up in construction activity.


July was one of the driest and hottest months that Irish farmers have seen for some time. While farmers no doubt welcomed the July heatwave, they didn't get paid as well for their work that month as they did in June. The Agricultural Output Price Index – which measures the price of agricultural produce sold by farmers – fell by 4.3 per cent last July when compared to June 2013. Given that farmers aren't in a position to set their own prices, they are at the mercy of the market as well as the seasons. A fall of this nature undermines confidence, erodes incomes (specifically in rural Ireland) – which in turn feeds through to the larger economy.


And so the recession has ended. Again. GDP – which measures our economic growth – increased by 0.4 per cent in the three months to June when compared to the first three months of the year, according to the CSO. Whether or not this growth can be sustained remains to be seen. So the marginal increase in exports last July – to the tune of €184m – is more than welcome. We are an immensely open economy and rely hugely on our exports when calculating GDP.


US Federal Reserve chairman Ben Bernanke delivered a surprise to the world earlier this week when he announced that he was going to put off his row-back on quantitative easing until another day. The bond market can breathe a sigh of relief as its biggest buyer is still flashing the cash – if only for a another short while. The recent investor uncertainty around quantitative easing hasn't done Ireland any favours, pushing up the cost of Irish borrowing. The Irish bond yield is finding it difficult to stay below 4 per cent as a result – that's bad news for the Irish taxpayer who pays the interest.


The amount of rental properties available in Ireland declined by 36 per cent over the last year, according to the latest Daft report. Even if they're heavily in debt, this is a clear sign that property investors are seeing better economic times, as they shouldn't have much problem finding tenants today and in the foreseeable future. This should eventually lead to a boost in construction activity, which will give new life to an industry that has all but shut down in the past five years.

Sunday Independent

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