Watch out for politicians dining out on positive news this week, as a slew of economic indicators is expected to tell a pretty upbeat tale.
A snapshot of March unemployment levels is due on Thursday, and Merrion Capital chief economist Alan McQuaid believes the jobless rate is likely to have fallen slightly to 10 per cent. "It's definitely headed to single digits [on a seasonally adjusted basis] in March or April," he said.
Improvements in employment levels naturally have a positive knock-on effect on other key indicators. If fewer people are signing on, less social welfare is being paid out; and if more people are working, this boosts income tax receipts, as well as – potentially – the VAT take, as consumers have more money in their pockets to spend.
Exchequer figures are due to be published towards the end of this week, and McQuaid expects that tax receipts, which have been “fairly bullish” for some time now, will be ahead of targets.
March figures for the purchasing managers’ index in the manufacturing sector are also scheduled for release this week, and McQuaid says it’s difficult to know whether they will show an improvement. However, on the basis of the weakening euro, the reading could well be up.
The falling euro is set to benefit Ireland more than other European countries because of our close ties with the UK and US, for example by boosting tourism, McQuaid added.
“Overall, you’d have to say the numbers should by and large underline the fact that the economy is recovering,” he said. Although many people who’ve been through “traumatic times” will still be struggling for some time yet, on the broader canvas, things are improving, he said.