If we consider politics over the past 10 years or so, what is clear is that there was a distinct step to the right in the UK, in the US and elsewhere in the world; the consensus around dealing with the fall-out of the financial crisis taking us in that direction. But there is evidence that we are now set for something of a left turn. And a look at the policies coming from the main UK political parties ahead of the General Election gives credence to this view.
Today’s batch of housing market figures for the third quarter could be summed up as “two up two down”. Two indicators (residential property prices and house completions) posted year-on-year growth. Meanwhile housing starts and the number of residential property transactions are on the wane.
Generation rent. House prices are always one of the most closely watched economic indicators by the general public or at least homeowners and potential first-time buyers. Although the rise of the private rented sector over the last decade means for an increasing share of society, rental prices are more relevant than house prices. Homeownership is not on the radar for as many under 40s as it once was.
Northern Ireland’s Labour Force Survey (LFS) churned out more record highs and lows of the positive variety in Q3 2019. However, looking through all the statistical noise there are still signs that suggest the labour market cycle has turned. A surge in self-employment has been accompanied by a reduction in the number of ‘employees’ working. Meanwhile the total number of hours worked and average hours worked has eased back from its highs earlier in the year. Given the marked deterioration in business conditions in Q3 and Q4 it is expected that this will increasingly become evident within the labour market in the coming quarters. Q2 2019 is still likely to have represented the peak in the total number of employee jobs as measured in the Quarterly Employment Survey.
After eight years at the helm President Draghi is bowing out. He will forever be remembered for three words – “whatever it takes”. He certainly played an outsized role in salvaging the single-currency project in its darkest days. It’s now over to Lagarde to pick-up the challenges – convincing reluctant eurozone governments to use fiscal space and pushing inflation back up to target.
US/China trade tensions are intensifying. The Chinese authorities announced $75bn 5-10% tariffs on US imports, targeting cars, oil and soya. US President Trump retaliated, unveiling further tariff rises though his stance at the latest G7 meeting was conciliatory. Meanwhile, Federal Reserve Chair Jay Powell hinted at another rate cut soon.
The latest slew of economic data will leave many wishing that government statisticians had taken a longer summer holiday. Faced with a slowdown in world trade, the German economy experienced a mild contraction last quarter, while prospects for the UK and US look ever more reliant on consumers.
Imagine you are a Dragons’ Den judge. The CEO of (a fictional) ‘Grey Enterprises’ is pitching for investment to enable further expansion in its consumer goods business. The firm’s customer base (the over 65s) has grown by one-quarter over the last decade with 1 in 6 of the Northern Ireland population using the product.
There is an annual cycle in consumer finances. January, February and March are generally lean months for spending as wallets and purses recover from Christmas. The second quarter of the year sees preparation for the holidays, before a post-summer recovery. Spending then accelerates again, due to the end of year festivities, before the cycle repeats.
The labour market continues to be a source of positivity amidst the Brexit gloom. Northern Ireland’s employment rate – the proportion of people of 16-64 year olds working – hit a record high of 70.9%. Meanwhile the headline unemployment rate in the three-months to January 2019 is an eye-catching 3.5%. However, amongst the raft of labour market statistics the most meaningful jobs barometer was the Quarterly Employment Survey for Q4 2018. Continue reading