02 Oct 2014

Economy to surge by 5.3pc this year, Goodbody says

Filed under: Business News

Ireland will be by far the best performing Eurozone economy as the recovery here broadens and strengthens. according to Goodbody chief economist Dermot O’Leary. Growth will be 5.3pc this year and 4pc in 2015, he said in a new report.

He made the comment as new data from Investec shows manufacturing output and employment grew in September for a 16th straight month.

While the rate of growth slowed, Investec’s Philip O’Sullivan said there were some interesting trends during the month.

“Input prices fell sharply, with some panellists attributing the decline to sanctions relating to the Russian situation, which has led to excess supplies of some goods. Indeed, the extent of the drop in input prices was the largest seen in close to five years.”

“Output prices also fell sharply during September, as firms passed on savings from both Russia-related factors and the slide in world dairy prices,” Mr O’Sullivan added.

The amount of goods purchased by Irish firms increased for an eighth month in a row.

“Last month we said – while noting that the risks to global growth and geopolitical tensions have increased in recent months – we expect to see continued progress into 2015,” Mr O’Sullivan said. “Some of the indices in today’s release certainly reflect these factors, but we remain of the view that the recovery underway both domestically and in many of Ireland’s key trading partners is sufficiently robust to withstand any pressure from those sources.”

Irish Exporters Association chief executive Simon McKeever welcomed the figures but said it’s important to guard against complacency.

“We need to remain fairly cautious…there’s an awful lot of uncertainty out there,” Mr McKeever told the Irish Independent.

“There is a danger – where about 60pc of our exports are going to the EU at the moment – that market is looking particularly uncertain. That would worry us.”

Last month, manufacturing growth in the Eurozone slowed to its lowest in more than a year.

Article Source: http://tinyurl.com/kbwqb42

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