GDP & GNP – Real GDP fell by 8.5% yoy in Q1 2009 while GNP declined by 12%. This was mainly driven by the reduction in consumer spending (9.1%) which represents about 60% of national income.
Exchequer Returns – Tax receipts for Jan – July were down €4bn (18%) on the same period in 2008. The pace of decline has increased as compared to June.
Consumer Confidence – Consumer sentiment fell in July as consumers expectations of the next 12 months become even more negative.
Inflation - dropped to -5.4% in June. Most forecasts put annual inflation between -4.25% and -4.5%. Inflation could fall as low as -6% nfor some months of the year. Mortgage interest rates are down 46% yoy and rents are down 16%.
Interest Rates – Bloxhams forecast ECB rate to remain at 1% until at least June 2010 while the ESRI expects a rate of 1% in 2010.
Employment – Unemployment rate increased to 12.2% in July 2009. Total Adjusted Number of Unemployed Stands at 423,400. Unemployment to be around 15% by end of 2010.
Mortgage debt decreased by €62m in June. decreased by €62m in June following decreases of €18m in May and €114m in April. April was the first time that growth was negative since the series began in 1990. The annual rate of increase declined to 1.9% in Jun (the lowest rate on record) from 2.6% in May. The annual rate of increased has been declining for the last 35 months.
New Lending in Q2 2009 was €2.2bn, a 71% drop from Q2 2008 when lending was €7.6bn and 8.8% increase from Q1 2009 when lending was €2.0bn. FTBs increased their market share for fifth successive quarter to 25.1% (by volume) and 30.3% (by value) – highest proportion of mortgage market since series commenced and are no the largest segment of the mortgage market.
House Prices fell 11.7% Nationally and 15.8% in Dublin in the last 12 months.Month on month falls of over 1% across all areas.
House completions totalled 2,121 units in May as compared to 2,430 in April (13% fall) , and 4,611 in May 2009 (54% fall).
House registrations totalled 212 in May compared to 358 in Apr (41% decrease mom), and 1,419 in Apr 08 (85% decrease yoy).
House commencements totalled 731 in May as compared to 778 in Apr (6.0% decrease mom), and 2,576 in May 08 (71.6% decrease yoy)
Rent, Rents actually paid by tenants decreased by 16% yoy according to the central statistics office. The rental stock has increased by 540% in the last 3 years but has levelled off in the past couple of months nationally and in Dublin..
Interest rates. ECB kept rates at 1% for the fourth month in a row in August. Unless the EU economy deteriorates further, 1% looks like being the bottom with a pick up in rates not expected until at least summer 2010.
Affordability is at early 1990s levels after the last drop in the interest rates and continued house price declines. There is potential for affordability to increase further from falling house prices and but this must be weighed against increasing taxation and falling employment levels.
All good news then!