If transport capacity to and from the island of Ireland is a measure of economic activity, then we are set for period of expansion in 2018, writes Joe Gill.
Airlines, in particular, and ferry companies, have laid out plans to raise the frequency and number of craft and vessels serving Irish airports and seaports. This should pave the way for a further boost in economic activity and another shot in the arm for tourism.Flight numbers are rising to a number of countries.
The US market will benefit from particular expansion by Aer Lingus, Norwegian and other carriers. The Gulf airlines are adding frequency to their mega hubs in Dubai, Abu Dhabi and Doha. Turkish Airlines will grow its Istanbul connections, while Cathay Pacific is opening a new Hong Kong route.A number of carriers are growing links between Ireland and other European countries too.
At sea, ICG’s Irish Ferries is increasing its capacity.
The effective mushrooming of transport links throws off a number of economic benefits. Exporters and importers will have a wider range of choice.
At the airports and seaports, activity levels will rise, boosting employment and business for service providers such as taxis, hotels and bus operators.
Exit data from 2017 shows that construction activity, particularly in housing, is set to materially advance in 2018. Inward investment is also growing.
The big fly in the ointment is Britain. As our largest trading partner the UK will continue to be — regardless of a soft or hard Brexit — a valuable partner for Ireland.
Economic data in November and December in the UK diverged sharply from that in Ireland. Consumer sentiment is sagging, investment levels have deteriorated, and many companies are in a holding pattern awaiting clarity on Brexit.
That points to a less than rosy trend for the British economy as 2018 unfolds.
Economic experts of all hues have been warning policymakers in the UK that the Brexit process will damage their economy. That has not stopped a succession of political gaffes.
The most visible measure of how the UK will be doing politically and economically is sterling. If the Brexit negotiations go badly expect further weakness. If there is a shift towards a more rational outcome, including the UK staying in the single market and customs union, then the currency should stabilise and even rally. For Irish exporters, the latter option is the preferable. Anything that helps confidence of UK consumers will benefit Irish enterprise too.
Joe Gill is director of corporate broking with Goodbody Stockbrokers. His views are personal.