About this time last year, the price of beer in Belfast’s now iconic Grand Central Hotel caused much reaction, with its Observatory Bar selling a pint for £8. Clearly, this is a niche indicator, but it led to questions by some observers in relation to what this said about the local economy, the strength of the tourism sector, and the spending power of local consumers.
2018: The year of the dog and the backstop…
2018 was the Chinese year of the dog, but in this part of the world, it will go down as the year of the backstop, when promises around the Irish border came back to bite Theresa May. Indeed, some have said that Brexit as a whole was the one instance when the canine caught the car and then didn’t know what to do with it.
Chief Economist’s Weekly Brief – Stuck in orbit
The labour market continues to strengthen but wage growth refuses to escape its sluggish trajectory
Chief Economist’s Weekly Brief – Sweet sweet services
A reversal of fortune in the service sector should hail a return to business as usual for the UK economy.
Planes, cranes and automobiles…
We’re just over a month-and-a-half into 2018, and planes have been dominating the economic news agenda this year so far.
On the one hand, we’ve had the trade dispute between Boeing and Bombardier come to a head, following weeks and indeed months of hand-wringing about the potential impact of any tariffs on the Canadian firm’s Belfast operations. On the other hand, we’ve had another stream of good news on the tourism front, as more and more overseas visitors flock to Belfast and Northern Ireland.
Chief Economist’s Weekly Brief On the up
Economic news from the Eurozone and US was generally very good last week. Bond yields are pushing higher as a result. That’s good news for people worrying about the possibility of more years of slow growth and low interest rates, sometimes called secular stagnation. It’s also a relief to the many firms grappling with big pension deficits. Continue reading
2017 a positive year but dogs on street know there are challenges ahead
Overall, 2017 has probably been a more positive year for the Northern Ireland economy than many would have expected. A wide range of indicators have improved during the 12 months, including private sector employment (now at a record high), construction activity, and both tourism and trade. However, many other indicators have been on the decline, and there are also some clear warning signs that the economy will begin to slow down in 2018. Here is a flavour of some of the key trends we have seen this year, and which will set the context for moving into the 12 months ahead. Continue reading
No surprise that new car sales are falling
Northern Ireland retailers have benefited from the tourism boom and a surge in cross-border shoppers. With the latter boosted by the post-EU referendum depreciation in sterling. This provides a veneer of consumer strength driven by visitors. However, the underlying picture is somewhat weaker.
New car sales are a key barometer of consumer confidence and provide a more meaningful indicator of the health of the consumer. Inflation has been outpacing wage growth and this is sapping household disposable incomes. A significant range of welfare benefits are also in the midst of a multi-year freeze. Against this background it is perhaps not surprising that the biggest discretionary spending item after housing, new car sales, are falling.
Showrooms reported their worst October for sales of new cars in five years, with registrations for the first 10months of the year down over 5% y/y.
2017 looks set to see the biggest annual decline since 2011. Local new car sales are over 20% below their peak in 2007.
This compares with the UK where new car sales, though falling, are still 8% above their pre-recession high. 2018 is also expected to be a challenging year for the local consumer with the cost of living squeeze set to tighten its grip.
Chief Economist’s Weekly Briefing – All work and no pay
With unemployment at a 40-year low, wages should be rising at roughly twice their current pace. That they are not reflects rising supply, a shift to self-employment, less job switching than usual and, above all, stagnant productivity. It can also stump central banks used to the conventional relationship between work and pay. Continue reading
Chief Economist’s Weekly Briefing – Trade and trade-offs
Theresa May’s Brexit speech reiterated the Government’s negotiating priorities and spelled out some of the likely consequences. With the triggering of Article 50 at most 10 weeks away the real negotiations will soon begin.