Leading economist Jim Power briefed a full to capacity breakfast briefing in Kinsale organised by accountants Fitzgerald & Partners. The event was attended by leading stakeholders in the region and sponsored by AIB Bank. The event was attended by Government Minister Jim Daly and Senator Tim Lombard.
Jim commended Fitzgerald & Partners on being selected as one of only two Irish accountancy firms to feature as case studies in a global research report on the Small to Medium Practice of the Future. This research is based on surveys of almost 2,000 accountancy practices in 50 countries. This report will be distributed globally to the 900,000 accountants in 16 countries who are involved.
The official forecasting agencies, such as the IMF and the OECD, are expecting 2019 to be another reasonable year for the global economy, but growth is expected to ease somewhat and the risks are correctly deemed to have been heightened considerably. Brexit is still shrouded in deep uncertainty and does not accommodate the application of any semblance of logic.
Looking ahead to 2019, the outlook looks reasonably good, but the risks and challenges are quite clear. The key domestic challenges include:
- The imbalance between demand and supply in the housing market, which is putting considerable upward pressure on house prices and rents. It appears likely that house price inflation will moderate in 2019 due to affordability issues, but rents look set to remain under considerable upward pressure. Housing supply needs to increase.
- The pressure to increase expenditure on public services, particularly health, will remain strong and will pressurise the public finances. Ireland still has a dangerously high level of Government debt.
- As the economy steadily moves towards full employment, wage pressures are likely to intensify and the recruitment and retention of workers will become a bigger challenge for all employers.
There are always risk factors out there that will need careful watching, but on balance it does appear that growth in Ireland in 2019 looks set to be softer in 2018, but a reasonably strong level of economic activity still looks the most likely outcome.
However, we do need to manage the economy and the public finances in a very prudent manner in the face of such intense external risk factors and domestic pressures.
The economy of the South West is still performing strongly and the prospects look good. The unemployment rate in the South West in the third quarter of 2018 stood at 4.9% of the labour force, which is the lowest in the country. A strong multinational presence, a strong tourism performance and the growing congestion in Dublin, are all in favour of the South West. The impact of Brexit on the strong agri-food sector in the region is a matter of deep concern and poses a considerable risk to the region. Next year will be a more challenging and uncertain year for Ireland.
Fitzgerald & Partners
9 Pearse Street, Kinsale, Cork
021 477 4500