There are still many out there who either refuse to admit that a compelling recovery is under way in the economy or simply do not believe it. The fact is that the evidence is there for all to see and is being added to on a weekly basis.
For those who have believed, mainly for politically motivated reasons, that the economy would never recover unless a left-wing government came in and changed everything, these must be difficult times. For the rest of us, they are relatively good times.
Price cutting and a weaker currency helped eurozone business activity accelerate in February, according to surveys published just before the European Central Bank embarks on a trillion-euro stimulus programme.
Survey compiler Markit said the surveys pointed to first quarter GDP growth of 0.3%, the same as at the tail-end of 2014, as business activity expanded in the bloc’s four biggest economies for the first time since last April.
That growth prediction matches the median forecast in a Reuters poll taken last month.
Ireland’s unemployment rate declined another 0.2% in February, to reach 10.1%, its lowest level since 2009 — the last time the percentage figure was in single digits.
Latest data, published yesterday by the CSO, showed that 4,300 people came off the Live Register last month and back into work, reducing the seasonally adjusted total still on the register to 355,600. The number of long-term unemployed fell from 164,844 in January to 162,776 last month.
The Government said the figures show the economic recovery is improving, with each person returning to employment saving the exchequer roughly €20,000 per year via reduced social welfare payments and increased tax revenue.
The country’s services sector is continuing to expand in the early part of the year with strong growth across all segments.
The domestic economy helped drive the sector’s growth last month while improving client confidence also translated into new orders for businesses.
The service sector experienced its 31st consecutive month of growth in February as the Investec Services Purchasing Managers’ Index headline figure climbed to 61.4, down slightly from 62.5 in January but representative of strong growth nonetheless.
Latest exchequer returns have raised hopes Ireland may beat its 2.7% of GDP budget deficit target for 2015.
The Department of Finance yesterday reported the generation of nearly €6.74bn in tax revenue for the first two months of this year, almost 16% up on the same period last year and 5.4%/€345m ahead of forecasts made in the last budget.
The figures also mean that the exchequer deficit amounted to just €205m as of the end of last month, compared to a deficit of €1.68bn at the same point last year.
Jonathan Hill, the EU’s financial services chief, said he will assess the suitability of global rules on bank indebtedness and funding before implementing them within the bloc.
Mr Hill said that he will decide if it is “appropriate” to introduce a binding leverage ratio and net stable funding ratio proposed by the Basel Committee on Banking Supervision as part of the overhaul of its international banking rulebook developed in response to the 2008 financial crisis.
“The EU is a committed supporter and indeed driver of reforms in the global arena,” Mr Hill said yesterday in Brussels. “But as with our capital and liquidity rules, the EU should not be afraid to implement the international standards in a way that makes sense for Europe and Europe’s diverse financial landscape.”
Central bank bond-buying programmes aren’t working, BlackRock’s Peter Fisher has claimed.
Quantitative easing is supposed to push investors into riskier assets, Mr Fisher, senior director of the BlackRock Investment Institute and a former under secretary of the US Treasury and executive vice president of the Federal Reserve Bank of New York, said.
“It isn’t working,” Mr Fisher said. “Mostly, it drives up the price of the low-risk assets, as we’ve seen in Europe today.”
Labour market figures published by the CSO last week for the final quarter of 2014 contained further good news on the Irish economy, writes Oliver Mangan.
The data show the recovery in the economy is continuing to generate solid job growth with falling unemployment. It is also beginning to result in a pick-up in wages.
Employment rose by 10,000 or 0.5% in quarter four, following a rise of 11,000 or 0.6% in the third quarter. On a year-on-year basis, employment was up by almost 30,000, or 1.5%. Full-time employment actually rose by 40,000 or 2.7% over the past year, with a decrease of 10,000 in part-time jobs. This shows that as the economic recovery gathers strength, more and more people are able to move out of part-time employment and into full-time jobs.
The fall in oil prices helped keep Eurozone inflation down in negative territory last month, but prices fell at a slower pace than at the start of the year.
Consumer prices in the 19-member bloc fell by 0.3pc in February, better than the 0.6pc fall recorded in January.
Oil prices remain well below the levels seen a year ago, but they have been rising again, which have helped to stave off a greater price fall.
Ireland’s manufacturing sector expanded at its fastest pace in 15 years last month, far outstripping the major European economies.
Output and new orders rose at faster rates than at the start of the year, when it seemed like the pace of growth was beginning to ease, according to the latest Purchasing Managers’ Index (PMI) for the sector.
Philip O’Sullivan, economist with specialist bank Investec, said February’s data was especially impressive given international concerns, including Greece and the Ukraine.
