Update: Current Economic Indicators – Finance 2nd October, 2014

QUESTION NOS:  72,74,76
DÁIL QUESTIONS addressed to the Minister for Finance (Deputy Michael Noonan)
by Deputy Bernard J. Durkan,Bernard J. Durkan,Bernard J. Durkan
for WRITTEN ANSWER on 02/10/2014 

 
* To ask the Minister for Finance the extent to which the economic indicators are currently in positive trajectory; the extent that this is likely to facilitate ongoing economic recovery; and if he will make a statement on the matter.

– Bernard J. Durkan T.D.

For WRITTEN answer on Thursday, 2 October, 2014.

* To ask the Minister for Finance the extent to which the current economic indicators are poised to facilitate growth and ongoing economic recovery; and if he will make a statement on the matter.

– Bernard J. Durkan T.D.

For WRITTEN answer on Thursday, 2 October, 2014.

* To ask the Minister for Finance the extent to which the economy remains competitive; and if he will make a statement on the matter.

– Bernard J. Durkan T.D.

For WRITTEN answer on Thursday, 2 October, 2014.

REPLY.

Following successful implementation of the EU-IMF programme, the Irish economy is emerging from the crisis and there are clears signs that economic recovery is under way. 

First estimates of economic activity for the second quarter of this year were very strong and were well ahead of consensus expectations, with GDP growing by 1.5 per cent over the quarter and by 7.7 per cent year-on-year. Taken in conjunction with first quarter data, GDP grew by 5.8 per cent in the first half of this year. The increase in economic activity was broadly-based with both domestic sectors and exporting sectors performing strongly.

Exports rose by 13 per cent in the year to the second quarter of 2014.  This was the fastest rate of expansion since 2001 and there is growing evidence that the impact of the patent expiry issue in the pharmaceutical sector has passed.

Consumer spending on goods has been strong in the first eight months of this year.  Retail sales in the period January to August were up 7 per cent when compared with the same period in 2013.  Core sales (excluding motor trades) were up 3½ per cent over the same period.  Investment is also growing, with both building and construction and machinery and equipment activity rising.  Recovery in the construction sector continued in August with the Purchasing Managers’ Index for the sector recording a thirteenth successive month of expansion.

Recovery is also evident in the labour market with employment increasing in each of the last seven quarters representing an increase of over 70,000 since the low point in mid-2012.  In line with this, the standardised unemployment rate stood at 11.1 per cent at the end of September, having fallen from a peak of 15.1 per cent in early 2012. 

Ireland’s competitiveness has significantly improved in recent years.  Low consumer price inflation over the last five years has meant that Irish price levels have fallen considerably relative to the euro area.  For instance, annual HICP inflation in Ireland has been below that of the euro area average for every year since 2008. This trend continued into the early part of this year, with inflation over the first six months of the year coming in below the comparable rate in the euro area.

The Government remains focused on maintaining the reform momentum to achieve the goals of creating more jobs, enhancing living standards and, ultimately, achieving full employment.  As set out in its Statement of Government Priorities 2014-2016, the Government is prioritising the actions needed to build on the economic recovery that is already under way to ensure that the benefits of the recovery are felt by everyone across the country.