In many ways, yesterday’s budget could be summarised as spend now, tax later.
To listen to consumers and the media, you would think that price is all that matters. Whether it’s house prices, holidays, the latest bargains, mobile phone contracts or even the price of a pint of beer, all people seem to focus on is the cost. And in many cases, price is indeed key. Think back to when chocolate bar companies shrunk their products rather than raise their prices, or how big a deal some retailers make out of their Boxing Day Sales and Black Friday deals. However, price isn’t always all that matters for consumers. Price, and what we’re prepared to pay, it turns out, is a complex thing.
The latest NIJobs.com Jobs Report with Ulster Bank was published this week. It shows that the jobs market remains busy, driven by continued inward investment as well as recritment in other areas. Continue reading
The squeeze on living standards hasn’t gone away
In recent months an emerging narrative has been that the squeeze on UK living standards has relaxed or even ended. This refers to the pace of annual earnings growth overtaking inflation. However, real earnings growth remains modest at best. Meanwhile the squeeze continues for public sector workers on pay caps (1% p.a.) and households experiencing a multi-year freeze on working-age welfare benefits (until 2020). In light of the fact that the price of necessities including utility bills, motoring costs, rates bills and private sector rents (for Northern Ireland) are all rising at substantial rates and above the headline rate of inflation, it is premature to talk of a meaningful end to the cost of living squeeze. Continue reading
The financial crisis may be ten years old, yet many of the problems it exacerbated are even older.
The Northern Ireland economy continued to expand in Q1 2017, according to today’s data, albeit at a weaker rate than in the previous quarter. Private sector growth (+0.4% q/q, +3.4% y/y) was driven by the services sector (+0.5% q/q, +3.1% y/y) with industrial production (-0.2% q/q, +2.1% y/y) and construction (-1.7% q/q, +7.9% y/y) posting quarterly contractions. The fall in industrial production though conceals strong rates of growth within manufacturing firms (+0.9% q/q & +0.9% y/y).
Sterling is down 12% since the referendum and some effects of its decline are becoming apparent.
Pipeline pressures. Sterling’s weakness has fuelled import cost inflation. Manufacturers’ raw material costs rose by 19% y/y in February and firms have been passing some of these costs on to customers. Back in June factory gate prices were falling on an annual basis. Subsequently, output price growth has accelerated in every single month. Last month they were up 3.7% y/y the largest increase since December 2011. Price rises were evident across all product categories from food to fuel. Consumers have been warned. Further price rises are coming. Continue reading
We’ve all heard the oft-used phrase ‘the economy is the number one priority’. However, there is perhaps still a deficit in terms of public understanding of economic issues. People perhaps don’t realise how far Northern Ireland lags the rest of the UK in terms of GVA (and the gap has been widening) or how much more Northern Ireland receives in public spending. Continue reading
It had everything. There was intrigue, espionage, breakups, non-stop drama, and no end of fiction and fantasy. But whether you regard last year as the prelude to an economic horror, or something from an altogether more uplifting genre, what is clear is that 2016 was an epic, with significant implications for the local, national, and global economies. So with the annual Academy Awards having just been handed out, we’ve decided to suggest some potential winners of a hypothetical Economic Gongs. Here are the economies, personalities and organisations we think should be in contention for a range of bespoke categories.
Growth at the end of 2016 had the feel of a seasonal sale. Let’s hope the consumer avoids feeling buyers’ remorse.