Friday, September 05 16:17:06
It's a moderately busy week ahead for avid Irish economy-watchers with Construction PMI, New Private Car Licences, Consumer Confidence, Building and Construction Output and Consumer Prices due.
The main focus in the coming week will be on the construction PMI for August and the consumer price data for the same month. We are looking for continued improvement in the building sector, which should be reflected in another strong PMI reading, while as regards inflation, price pressures are set to remain well contained.
The recovery in the Irish construction sector gathered pace in July, helped by a series-record rise in housing activity. The rate of growth in new business quickened sharply to the strongest level since November 2004 and the pace of job creation picked up. The Ulster Bank Construction Purchasing Managers' Index (PMI) rose to 62.6 in July from 59.9 in the previous month and signalled the fastest rise in activity in three months. Total activity has now increased in each of the past 11 months with panellists linking the latest rise to higher new orders, and in some cases the release of projects that had previously been on hold.
"We are looking for continued improvement in August, with a headline index of 63.0 forecast," said Alan McQuaid of Merrion Economics.
For consumer prices, inflationary pressures continue to remain fairly weak. Prices were down 0.2pc in the month in July, giving a headline annual inflation rate of 0.3pc, down from 0.4pc in the two previous months.
The KBC Ireland/ESRI Consumer Sentiment Index increased in July to 89.4 from 81.1 in June, while the 3-month moving average rose to 83.3 from 82.6. Within this, the sub-index of consumer expectations picked up to 79.9 from 71.2 in the previous month, with the sub-index of current economic conditions jumping to 103.5 from 95.8 in June. The improvement in the labour market and the economy in general is boosting consumer confidence as is the media speculation of an income tax reduction in the October Budget. "We are looking for the main index to increase to 90.0 in August," said Mr McQuaid.
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