Reports show signs of recovery from recession

SIGNS that Ireland is battling its way out of recession have emerged as two reports reveal how consumers are starting to spend again and house prices are starting to stabilise and even rise in some areas.

The latest KBC/ESRI consumer sentiment index has shown that consumers – although still cautious – were more inclined to spend last month and are less pessimistic about the year ahead.

The actual index rose to 61.9 in March, compared to 59.4 in February and an all-time low of 39.6 in July 2008.

The survey said that despite consumers remaining “very cautious” and although there is little prospect of a spending spree anytime soon, there are signals of a turnaround in household spending.

KBC economist Austin Hughes said: “At the very least, however, these data point towards the possibility of a less awful outlook for consumer spending than seemed likely a couple of months ago.

“Perhaps surprisingly, Irish consumers were a little less concerned about their personal household finances and a little more inclined to spend in March. Interestingly, consumers felt their household finances had weakened in the past 12 months but they were slightly less pessimistic about the outlook for the coming year.”

Meanwhile, another report has revealed that asking prices for houses in some Dublin areas are increasing while prices for apartments in Cork city look to be stabilising.

Property trackers MyHat.ie found that compared to the overall drop of 3% in asking prices for three-bed houses in Cork city in March, two-bed apartments only dropped by about 0.5%. The analysis found that asking prices for two-bed apartments in the northside of Cork city were increasing.

Prices have increased by 9% in Dublin 18 and by 7% in Dublin 6 from the last quarter of 2009 to the first quarter of this year, according to the analysis.

Also last month there was a surge in new car registrations with figures from Motorcheck.ie showing an increase of 90% for passenger vehicles registered as against the same month in 2009.

The latest economic commentary from the Economic and Social Research Institute (ESRI) has also predicted that the Irish economy will grow by 2.5%, next year.

It said that while 2011’s return to growth is to be welcomed, “it should be seen as a modest pace of growth”.

The ESRI also expects consumer spending to fall by 0.75% this year, but to return to growth in 2011 with a 1.5% rate of increase.

On a less positive note, however, the think-tank bleakly predicted the number of people in work will not grow next year despite economic recovery.

The ESRI said that while the unemployment rate will dip slightly to 13% this will in large part be due to an estimated 100,000 people leaving the country between 2009 and 2011. They predict employment levels will be stagnant at about 1.9 million in 2010 and 2011.