Housing recovery, but legacy of boom lives on

key-979593_1280.jpgAs we approach the 10th anniversary of Northern Ireland’s house price peak (and subsequent correction), we’ve been seeing some encouraging signs in the housing market across a range of indicators. Despite the ongoing recovery over the last few years, though, it is fair to say that this does not mean we are ‘recovered’.  Indeed, ‘a recovery’ in house prices / house building back to the freak peaks of 2006/2007 is neither expected nor viewed as desirable. Continue reading

Economic Gongs: Best and worst performers in an ongoing drama

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.

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Chief Economist’s Weekly Briefing – Hard earned

crowd-71255_1280We’re breaking records for the number of people in work, yet more productive jobs are what we really need.

Record breakers. 2016 ended with
the UK’s highest share of people working since we started counting it in the 1970s. At 74.6% the working age employment rate hit a new record and the number in work reached 30.6 million. Continue reading

Three-in-a-row: NI notches up its 3rd year of house price growth

5474802142_e51c292c1b_bThis year will mark the tenth anniversary of Northern Ireland’s house price peak which heralded the start of a sustained period of collateral damage for the wider economy and not just the housing market. Residential property prices peaked in Q3 2007 and subsequently troughed in Q1 2013, down a whopping 57% some 5½ years later. Since then the housing market has been in recovery mode with three successive years of house price growth. For many homeowners the last ten years has represented a lost decade with aspirations blighted by negative equity. However, the combination of house price growth and time (assuming repayments) has seen the incidence of negative equity recede.

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Chief Economist’s Weekly Briefing – Aim high

aim-high-skyscraperPresident Trump has promised to unveil a spectacular reform of the US tax system in the next few weeks to boost the economy. Meanwhile the labour market has been producing spectacular results itself.

Ambitious. The number of Americans in work rose by 227,000 in January and the unemployment rate held steady at 4.8%. During President Obama’s second term employment increased by 12 million (8%), impressive alongside the UK’s still-respectable 3%. President Trump aims to add 25 million jobs over a decade. That’s very ambitious indeed but there are historical precedents: both the Reagan and Clinton administrations saw rates of job growth that, if repeated, would see the target being met. But they both arrived at the White House towards the end of recessions, Trump’s task is harder.

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Growth of business activity remains solid, but inflationary pressures intensify

Today sees the release of January data from the Ulster Bank Northern Ireland PMI®. The latest report – produced for Ulster Bank by Markit – pointed to a positive start to 2017, with further increases in output, new orders and employment recorded. That said, rates ofexpansion eased from the end of last year. Meanwhile, price pressures continued to intensify, with rates of inflation for both input costs and output prices among the sharpest in the survey’s history.

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Chief Economist’s Weekly Brief – On borrowed time

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Two deficits of two very different kinds hit the headlines over the last two weeks, the budget deficit and the current account deficit. The former is shrinking slower than was planned, the latter is widening. Together they imply that the UK is increasingly reliant on foreigners to fund our standard of living. Maintaining the outside world’s confidence is therefore crucial for the stability of the UK economy.  Continue reading

Economic Gongs: Best actors in an increasingly unpopular drama

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There is an increasingly unpopular drama unfolding in the global economy. It’s not quite the epic of 2007/8. But it certainly has economists and investors gripped, as we have witnessed the Big Short on oil prices and a Revenant-style bear market that has mauled the share prices of the stock markets’ biggest stars. Continue reading