Irish Growth Threatened by Housing Market Fears

The Irish economy is experiencing mixed fortunes, with strong employment growth but high rents and a dip in consumer confidence. Unemployment in the Dublin region fell in the three months up to September.

There was strong economic growth, according to the Dublin Economic Monitor which is put together for the four Dublin local authorities by DKM Economic Consultants and KBC Bank, Yahoo reported.

But the region is being hit by a dip in consumer confidence, and rising rents and surging residential property prices. Consumers appear to be downbeat about their fortunes as they fear the negative impact of the Brexit vote and changes in US policy following the election of Donald Trump.

But cost-of-living pressures may be having an even stronger influence on consumer confidence, according to KBC Bank economist Austin Hughes. Rents are at all-time highs in the capital, with public transport and motor insurance costs also rising in the past few months.

“Dublin consumer sentiment declined significantly in late 2016 as the mood of consumers in the capital weakened notably more than that of consumers in the rest of Ireland,” Hughes said.

Consumers are nervous about Brexit and changes in the US. “However, a more influential factor was a downgrade of consumers’ own personal finances that may reflect pressure on living costs in Dublin,” he said.

Jobs are being created in the capital, with the construction and industry sectors showing the largest expansion. Unemployment in Dublin has fallen to 7.8%. The private services sector also had jobs growth, with almost 4,000 added compared with the previous year.