Chief Economist IDA Ireland
Irish economy back to pre-recession levels
Last month’s GDP release showed that the Irish economy returned to pre-crisis levels in real terms in 2014. The good news has continued over the rest of the month with a flurry of releases pointing to ongoing improvements in the economy. This month’s Markit/Investec PMI’s show a strong end to Q3 with both the manufacturing and services sector continuing their expansion. The latest unemployment figures put rate at unemployment at 9.5% in August (from 11.1% in Aug 14) while the volume of retail sales were up 9.9% year on year in July. Buoyancy in the economy is showing up in the public finances, with the latest figures showing government revenues up 5.9% in the year to August, with income tax (+6%), VAT (+7.9%) and corporation tax (+38.1%) all contributing significantly.
Employment growth accelerates in Q2
The numbers employed in the Irish economy increased by 3% in Q2 2015 (year on year), up from a 2.2% growth rate in Q1. The total numbers at work are now up 130,000 on the 2012 trough (on a seasonally adjusted basis) bringing total employment to 1.96mn. As in the previous quarter, almost all of the increase was driven by full time employment. Employment growth was widespread with 11 of the 14 economic sectors growing, the largest increases were in Construction (+19,700), Industry (+10,100) and Financial, insurance & real estate activities (+5,500). Unemployment decreased for the 12th successive quarter in Q2. Long term unemployment fell from 6.8% to 5.5% over the year to Q2, and has fallen dramatically from its peak level of over 200,000 in 2012 to 118,600 in Q2 2015.
Net emigration falls for the 4th year
The latest population figures from the CSO show the population increasing by 25,800 in the year to April 2015. The change was driven by a natural increase of 37,400 and a net outflow of 11,600. The net outflow of people from Ireland was down for the 4th year, and was almost half its 2014 level of 21,400. The number of people leaving the country overall was down by 1,000 to 80,900; however there was a much larger drop in the number of Irish nationals leaving (down 5,400 to 35,300). The numbers entering the country increased by 8,700 to 69,300 mainly accounted for by non- Irish. Over 70% of those emigrating were either at work or a student in the period prior to departing. As the labour market continues to improve and better opportunities in Ireland should persuade more of this cohort to remain in Ireland.
Department of Finance Monthly Bulletins: http://bit.ly/1gTymzQ
Department of Finance Spring Statement: http://budget.gov.ie/Budgets/2015/SES.aspx
CSO Population and Migration Estimates: http://goo.gl/NI9tDW
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