A positive forecast - Signs that justify some optimism

The late Brian Lenihan’s first-green-shoots-of-recovery claim made nearly three years ago was so disastrously off the mark that today most positive crystal ball gazing is reluctantly embraced like a long lost but still slightly malodorous great aunt.

Cheerleading is not what it used to be, especially the plainly tribal kind. The kind of palaver that once silenced a discontented electorate — or cumann — is no longer as effective as it once was. However, the resurgence of Fianna Fáil suggests that there is still a market for some of it, no matter how forgetful you might need to be to pretend you can believe it.

Even with that kind of reticence this morning’s modestly upbeat outlook from Davy’s stockbrokers is as good a way as any to begin the week on a positive note.

For the first time since the turn of the decade the stockbrokers have, in a briefing document, strengthened their forecast for economic growth. They have upgraded their growth estimates for Ireland from 0.5% to 1.3% and forecast 2.1% GDP growth next year.

Add that prediction to the employment figures published last week which showed for the first time since 2008, the year the recession began, the number of people at work has increased over a six-month period and it may be possible to consider just a flutter of optimism. In the final quarter of last year 1.85m people had a job, which was a rise of 6,500 on the previous three months, according to the CSO.

Sector by sector fewer firms are cutting jobs and more say they need to employ workers. Of the 14 sectors considered just four reported quarter-on-quarter cuts in jobs in the last quarter of 2012. Two years ago 11 were cutting back, so the momentum has shifted to the positive side of the graph.

Those figures must be tempered though by the startling, unsustainable decline in the number of young people in work. Six years ago nearly 1m people under 35 had jobs. That figure today is around 666,000 so that category has lost a third of its jobs. Amongst under 25s the ratios are even more sobering — an incredible 57% decline was recorded. This is unquestionably the most pressing consequence of recession and it will be the prism through which history judges our response to it.

Nevertheless, those two metrics — upgraded growth forecasts and positive six-month job figures — are far better than those of recent years. If they can be augmented by a reduction in Government expenditure through Croke Park II then more than a flutter of optimism might just be possible.


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