2019 Economic Crystal Ball Gazing
Hello and welcome to 2019! We here at EcovisDCA hope that all of our clients, colleagues and friends had a wonderful festive season and are well-rested and ready to face the working year ahead. With 2019 just getting ready to kick off, we have decided to begin the year with a little run down of the most prominent predictions for the financial year ahead. Chief Economist for EY, Professor Neil Gibson has given his predictions for the year even amidst all of the Brexit uncertainty surrounding the year, and it will be interesting to see what comes to pass.
- GDP Growth to rise by 4.2%
According to Dr. Gibson it is likely that 2019 will see GDP growth remain strong. Rising employment levels and increasing wages should all contribute to this growth which he estimates could reach 4.2% this year.
- Employment Growth to rise by 2.7%
In welcome news for our island’s continued economic recovery, it is predicted that employment rates will continue to rise in 2019. According to EY’s studies, Dublin is now the most popular relocation location for firms needing to move in full or part out of Britain due to Brexit
- Wage Growth to rise by 3.6%
Following on from the previous, it is predicted that wage growth will remain strong in 2019.
- Consumer Spending to rise by 2.9%
It is predicted that consumer spending will grow steadily in 2019, with Brexit making Ireland a very attractive trade location.
- Migration to Increase the Population by 40,000
In perhaps one of the more unexpected predictions, it is presumed that Brexit tensions and a growing labour market may create migration, as Ireland becomes a more attractive prospect for companies and workers alike. The risk here is that our ever increasing rent prices may postpone some of the influx.
- Inflation to Increase by 1.8%
It is predicted that in 2019 inflation may increase, as prices continue to push upwards.
- House Prices to Increase by 4%
An unwelcome prediction for many who already feel pressured by the house prices in Ireland. It is predicted that migration following Brexit may mean that this will be largely felt in rental prices.
- Construction Inflation to rise by 7.5%
As we have spoken about many times, there is an increasing demand for housing in Ireland and rising prices reflect this. It is predicted that the cost of construction will continue to rise in the year ahead.
- Housing Completions to top 25,000
Demand for housing is set to rise in 2019 and this is set to place a further push on the construction sector.
- Tax Collected from Businesses and Tax Payers will rise by 4.2%
This is likely to be a simpler process due to PAYE modernisation, and it is said that a strong labour market and strong economic growth should see an increase in collected tax going forward.
- Government to Spend more than Collected in Tax by 0.1% of GDP
According to Dr. Gibson, “Ireland looks set to enjoy its first positive general government balance in a decade.” As the pressure to spend increases, it is thought that the balance may tip in a more positive direction this year.
- Unemployment will reduce further to 4.9%
Unemployment was an issue that plagued Ireland during the economic downturn, and it is predicted that growth will cause unemployment levels to drop even further, perhaps even down to the levels seen at the peak of the financial boom.
It remains to be seen whether these predictions will come to fruition, and it will be interesting to check back in on them next year. We ourselves are very much looking forward to the year ahead and as always, should you have any concerns, queries or require further information on these or any other business and financial matters please don’t hesitate to contact us we are always available to help.
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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY