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The Journal
a day ago
- Business
- The Journal
Growth, jobs, wages: there are plenty of positives on the sunny side of Ireland's economy
WE LIKE TALKING about Ireland's economic problems. Focusing on the problems has plenty of merit – it's how things tend to improve over time. But there's a balance to be struck. And focusing too much on the negative can end up leading to a fatalistic view of the state the country's in. So, in the interest of injecting some cheer during a bank holiday weekend, we're taking a look at some of the things going right in Ireland's economy (with a few caveats). Without further ado… 1: Growth Straight off the bat – Ireland's economy is growing. By how much is difficult to say. As is the case with many Irish indicators, there's room for interpretation around particular statistics. Normally, countries measure growth using GDP (growth domestic product), which is meant to measure all the things a state buys and sells. A rise of about 2-3% in a year is considered pretty good for a developed country. Below this level isn't great, and above it is very good. But in Ireland's case, GDP is extremely distorted by multinational companies - as we've explored before. Previously, GDP way overstated how much the economy was growing by. There was obviously the famous 'leprechaun economics' incident in 2016 , when Ireland's GDP soared by 26% in a single year. So instead, Irish analysts prefer to use 'modified domestic demand' (MDD). This is a measure created by the Central Statistics Office to evaluate economic growth while stripping out multinationals moving money around. By this metric, Ireland's economy grew by 2.7% last year , which would put the country in a pretty decent place. 2: Unemployment It's been talked about plenty over the years, but it's still worth mentioning: Ireland's unemployment rate is extraordinarily low. It's been hovering at about 4.5% for the past year or so, and recently dropped to 4.1% . In most economies, an unemployment rate of 5% is considered 'full employment', meaning almost everyone who wants a job, has one. It's not 0%, because some unemployment is considered normal. Think people who decide to leave a job, retirements, etc. So Ireland's 4.1% rate means that companies don't tend to have the pick of an enormous labour pool when hiring. This puts jobseekers in a better position. When you consider the unemployment rate was close to 16% in 2012 , there has been an incredible turnaround in just over a decade. Research published just last week found that this drop has been even more pronounced in disadvantaged areas , slightly narrowing the gap between the richest and poorest. 3: Wages What's growth and low unemployment without more cash in your pocket? Luckily, Ireland is experiencing wage growth. Average earnings rose by 5.4% over the last 12 months to €1,026 , crossing the symbolic €1,000 mark. The CSO said this was driven by a few factors. As well as low unemployment, Ireland also has high employment growth (i.e. new jobs being created). Employment is up by 3.3% annually. Meanwhile, the job vacancy rate – measuring how many positions are vacant across the economy – is stable, at the low figure of just over 1%. This has combined to drive earnings higher, with workers more in demand. Now, averages can be misleading. If you have two people – one earning €90,000 and the other €10,000 – the 'average salary' is €50,000. That's why it's also good to look at the median. This is the number in the middle of a dataset. In this case, it gives a better idea of what a 'typical' worker earns. Advertisement The figures here lag the 'average' stats a bit. The most recent numbers show median annual earnings rose by 3.3% in 2023 compared to 2022. While a fair bit lower than the 5.4% average wage rise, it's worth keeping in mind that these are two different years we're looking at. It's possible median wages are rising more strongly now. And 3.3% is still decent. 4: Inflation and spending In late 2022 and early 2023, governments across the western world were in near-panic at the rate of inflation. Prices surged internationally for a variety of reasons, including Russia's invasion of Ukraine and the impacts of Covid. This of course included Ireland, where inflation soared to a peak of 8.5% in early 2023 . Readers will no doubt know why this is bad: high inflation can quickly erode living standards and consumer confidence. This can cause a spiral which could eventually lead to a recession. Luckily, with a notable exception we'll come to, the worst of this seems to have passed. It's estimated that Irish inflation dropped to 1.4% in May , which is considered a rate where prices are under control. With inflation low and wages rising, people seem to have some cautious confidence when it comes to spending money. Retail sales rose over the last year, although not by too much - 1.1% when spending on cars was excluded. 5: Corporate tax This is one to just quickly touch on, as we've already covered it in-depth plenty of times . But the billions and billions which have poured into state coffers in recent years are unprecedented. It has provided Ireland with the closest thing to a real life 'magic money tree', something most countries would do anything to have. 6: Stock market Finally, it's worth briefly mentioning that Ireland's stock exchange is trading around all-time highs. The market is currently at 11,400 – for an explanation on what that means, read here . But the important thing to know is, the higher the number, the more Ireland's biggest publicly traded companies are worth. The index dropped to about 9,400 in late March on the back of tariff fears. But the exchange has surged again since. While this may not mean much to the man on the street, it is a sign that major Irish businesses are doing well. Ok, now the caveats Some points to quickly mention, for the sake of context. While inflation has broadly stabilised, food prices are still surging. The latest estimate from retail analysts Kantar Worldpanel suggests that inflation in Irish supermarkets is just over 4.5%. This tracks with CSO stats, which show food prices are up 4.1% over the last year. Housing and rent prices are also, of course, still rising. These jumped by 8.7% and 5.5% respectively in the 12 months to December 2024. For many workers, a wage increase of between 3% and 5% may be of little use if much of their spending is going on housing and food. The modified domestic demand figure for general growth is likely a good estimate of Ireland's growth, but we're still vulnerable to the impact of multinational distortion. Speaking of which, there's the looming dread around whether Ireland's corporate tax windfall will suddenly dry up, as the US is eager to get more cash from its multinationals . And while the companies currently on Ireland's stock market may be doing well, there are almost no new businesses going public. This is a long term concern, as it indicates medium and large Irish firms are moving their business abroad. But hey, we said we'd try to keep things positive for once. So while these caveats are pretty major, it's worth noting the good in the economy too. With growth low across the EU and many countries struggling, Ireland, at least for now, has quite a bit going for it. Readers like you are keeping these stories free for everyone... A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation. 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Irish Times
2 days ago
- Business
- Irish Times
Irish tourism feels the pinch of negative data
Eight months after the first cracks in Irish tourism began to show – at least from a statistical point of view – it looks like things are finally improving. But is more trouble afoot? Last September, results from the Central Statistics Office 's (CSO) Inbound Tourism series showed the number of those arriving into Ireland had dropped year on year by 0.7 per cent. A blip? It appeared not – the same metric continued to slide, down 5.1 per cent in October and continuously over the following months, reaching a nadir of 30 per cent down last February. If the industry was getting concerned, it was also getting confused. One only had to look at bookings on the ground, the hospitality sector began to say, to see something wasn't quite right with the CSO's numbers. READ MORE What followed was a sort of polite standoff between the statisticians and tourism bodies. Meetings were held, numbers were crunched, dissenting views were aired. The CSO, for its part, defended its data gathering, highlighting its characteristically robust methods and independently reviewed systems. [ CSO meets tourism industry over 'confusing' visitor data Opens in new window ] But as things neared fever pitch, the fever broke. Data for April , published this week, showed another decline, certainly – down 4 per cent year-on-year – but also indications of recovery. Michael Magner, president of the Irish Hotels Federation , said while there was still a discrepancy between the published figures and industry data, April's were 'more aligned with what businesses have been reporting on the ground'. Hotels, he noted, saw average room occupancy rates of 77 per cent in April compared with 74.5 per cent for the same month last year, as well as a 2 per cent increase in bookings for the first four months of the year. Tourism activity appeared to be holding up. But then another set of numbers kept the champagne corks firmly in place. [ Irish hotels to join landmark Europe-wide legal action against Opens in new window ] 'We are concerned about the overall drop in tourism spend which the CSO are reporting for April, down 10 per cent,' Magner said in a swift addendum to the positive observation on visitor rates. 'This would appear to be part of a wider trend so far this year, according to CSO figures. If this continues into the summer, it would pose an enormous challenge.' Visitor spend was down 22 per cent in March, 31 per cent in February, and 28 per cent in January. In fact, one would have to go back to October to see an increase. If it's not visitors, it's how much they part with – what might May bring?
Agriland
3 days ago
- Business
- Agriland
CSO: Food prices increase by 4% in past year
Food prices are estimated to have risen by more than 4% since last year according to the latest data released by the Central Statistics Office (CSO) today (Friday, May 30). The EU Harmonised Index of Consumer Prices (HICP) for Ireland is estimated to have risen by 1.4% in the 12 months to May 2025 and remained unchanged since April 2025. This compares with HICP inflation of 2% in Ireland in the 12 months to April 2025 and an annual increase of 2.2% in the HICP for the eurozone in the same period. Looking at the components of the flash HICP for Ireland in May 2025, food prices are estimated to have increased by 1% in the last month and by +4.1% in the last 12 months. Energy prices are estimated to have fallen by 1.3% in the month and decreased by 2.6% over the 12 months to May 2025. The HICP, excluding energy and unprocessed food, is estimated to have gone up by 1.8% since May 2024. Eurostat will publish flash estimates of inflation from the EU HICP for the eurozone for May 2025 on June 3, 2025. Commenting on the data published today, statistician in the CSO Prices Division, Anthony Dawson said: 'The latest flash estimate of the Harmonised Index of Consumer Prices (HICP), compiled by the CSO, indicates that prices for consumer goods and services in Ireland are estimated to have increased by 1.4% in the past year. 'Looking at the components of the flash HICP in Ireland for May 2025, energy prices are estimated to have decreased by 1.3% in the month and fallen by 2.6% since May 2024. 'The HICP, excluding energy and unprocessed food prices, is estimated to have risen by 1.8% since May 2024. 'Food prices are estimated to have grown by 1% in the last month and increased by 4.1% in the last 12 months. Transport costs have fallen by 3% in the month and decreased by 2.4% in the 12 months to May 2025,' he added. The Consumer Price Index (CPI) is the official measure of inflation for Ireland and is published monthly by the CSO. The CPI release for May 2025 will be published on June 12, 2025 and the final results of the HICP for Ireland for May 2025 will be published as part of the CPI release. The HICP is an index of consumer prices that has been harmonised to allow comparisons across eurozone countries. The CSO compiles the HICP flash estimates and final results for Ireland and submit those to Eurostat which then compiles the eurozone estimate and publishes that along with the results for the countries within the eurozone.
RTÉ News
3 days ago
- Business
- RTÉ News
Inflation eases to 1.4% in May, flash CSO estimate shows
Consumer prices eased to 1.4% year-on-year in May from 2% a month earlier, a flash estimate of the Harmonised Index of Consumer Prices from the Central Statistics Office estimates today. The CSO said that core Irish HICP, which excludes energy and unprocessed food, slowed to 1.8%, from 2.5% in April. Today's figures show that energy prices are estimated to have fallen by 1.3% in the month and decreased by 2.6% over the 12 months to May. But food prices are estimated to have increased by 1% on a monthly basis and by 4.1% on an annual basis, while transport costs are down 3% in the month and 2.4% lower in the 12 months to May. Eurostat will publish flash estimates of inflation for the euro zone for May on June 3. Meanwhile, Spanish inflation also dipped below the European Central Bank's 2% target in May, preliminary data showed today, boosting the case for more interest rate cuts in the euro zone.
Irish Examiner
3 days ago
- Business
- Irish Examiner
Irish inflation remains steady in May at 1.4%
Irish inflation remained steady in May and was unchanged compared to the previous month. New figures released by the Central Statistics Office (CSO) on Friday found that the EU Harmonised Index of Consumer Prices (HICP) rose by 1.4% in the 12 months to May 2025. This compares with an inflation figure of 2% in the 12 months to April and an annual increase of 2.2% in the HICP for the Eurozone in the same period. Looking at the components of the flash HICP for Ireland in May 2025, energy prices are estimated to have fallen by 1.3% in the month and decreased by 2.6% over the 12 months to May 2025. Meanwhile, food prices are estimated to have increased by 1% in the last month and by 4.1% in the previous 12 months. The HICP excluding energy and unprocessed food is estimated to have risen by 1.8% since May 2024. The consumer price index (CPI) is the official measure of inflation in Ireland, while the HICP is an index of consumer prices that has been harmonised to allow for comparisons across euro area countries. While the CPI includes mortgage rates in its basket of goods, the HICP does not. Eurostat will publish flash estimates of inflation from the EU HICP for the Eurozone for May 2025 on 03 June 2025. It comes as economists warn the ECB to avoid delays in its easing of monetary policy. The bank will lower interest rates twice more, according to a Bloomberg survey, but respondents warned it shouldn't wait too long between those moves or investors will conclude that its easing campaign is already over. Respondents predict quarter-point reductions on June 5 and at September's meeting, when new quarterly forecasts should shed more light on the effects of US President Donald Trump's reordering of global trade. That would bring the deposit rate to 1.75%, where the poll sees it settling through the end of 2026.
