Tuesday, October 16 10:11:51
More signs of stability in the economy have become apparent over the past couple of months with unemployment, inflation and manufacturing on a more even keel, according to the latest Economic Bulletin from NCB today.
The broker's chief economist, Philip O'Sulllivan said that Irish economic indicators have been quite positive of late.
At the start of October we saw strong PMI readings for both the manufacturing and services sectors. Exchequer returns figures for the first nine months of 2012 suggest that the government is on track to at least meet its fiscal targets for the year. The Live Register improved for a third successive month in September, which underlines the recent stable trend in unemployment in Ireland. The annual rate of inflation moderated to 1.6pc in September from August's 2.0pc, but this is only likely to represent a temporary respite for consumers, given announced increases in mortgage, transport and energy costs, he said.
"The internationally focused sector of the economy continues to perform resiliently, as evidenced by a record monthly merchandise trade surplus of E4.9bn in August and the seasonally adjusted production index for manufacturing industries, which was in positive territory (on an annual basis) for a sixth consecutive month, led by the export-centred 'modern' component of the manufacturing sector."
"Resilience of a similar kind has been observed in the property market, where the indications are that the worst is over," aded Mr O'Sullivan.
National residential prices rose on a month-on-month basis in both July and August, the first time since 2007 that prices had increased for two successive months. However, our sense is that, while the overall housing market is entering a new phase, the outlook is far from uniform. This is due to significant variances in the distribution of vacant properties across the country and also differences in the pace of correction from peak price levels. Thus we believe that while the risks lie to the downside in rural areas, our sense is that prices in the Dublin market have bottomed.