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4 economic trends to watch in Britain and Ireland in 2018

Written by Business World, on 10th Jan 2018. Posted in General

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2017 was a mixed bag for the economies of the Republic of Ireland and the constituent nations of the UK.

And the differing economic makeup of these economies partly explains their expansion or contraction, as well as the impact of events such as Brexit.

So a review of 2017 provides a good temperature check for four economic trends to watch in Britain and Ireland in 2018 — let’s take a look.

Manufacturing

Growth in the Republic of Ireland economy increased by 10.5 per cent in 2017’s third quarter.

The surge was propelled by a strong manufacturing sector — as well as the high performance of the information and communication sector.

The activities of large multinational companies in Ireland, lured by attractive tax arrangements, means the economy can be volatile — but even taking this into consideration, an estimated 6.5 per cent growth for the entire year outstripped government expectations.

A similar performance in 2018 would instil even more confidence in Irish markets.

Supermarkets

Supermarkets in Wales like Iceland and insurance firms such as Admiral topped the list of the nation’s best performing companies — with turnovers of £2.79 billion and £2.58 billion respectively.

In the bigger picture this contributed to an overall growth rate that was higher than the rest of the UK — although productivity still lags behind.

So in some ways Wales is moving in the right economic direction — but it’ll take years of sustained growth to compete with metropolitan powerhouses like London.

Digital

The digital skills gap in England continued to make headlines throughout 2017, with organisations like the Federation of Small Businesses pressuring the government to address the problem or risk a serious reduction in productivity.

But this gap in the market is potentially positive news for an established digital firm looking to expand — whether it’s a web development agency in Yorkshire or an SEO specialist in Scunthorpe.

For 2018, agencies will continue to benefit from companies that lack in-house digital expertise, while modern apprenticeships in digital marketing can prepare the next generation of workers to plug the gap.

Housing

Inner London house prices dropped by four per cent in 2017 — and property website Rightmove predicts that they’ll fall by two per cent in 2018.

This decrease should be compensated by an overall price rise of one per cent this year — but it would still be the lowest annual increase since 2011.

2017 saw the highest regional house price rises in the northeast and West Midlands and the national average price rise over the past six years has been 30.9 per cent.

Higher house prices make it more challenging for first-time buyers to enter the market, but they also encourage consumer spending and boost economic growth.

National economies in this part of the world can be as difficult to predict as the weather and the incoming climate is no more predictable than last year.

But these four economic trends to watch in Britain and Ireland in 2018 highlight some of the approaching challenges.

What are your economic predictions for 2018? Share your thoughts in the comments section.

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