New figures suggest economic growth is speeding up this year after an impressive advance in 2014. So, are the good times back?
To be sure, Ireland still bears deep scars from the crash. We live with its legacy. But recovery is gathering pace and it is broadening out. We're not nearly back to the days of rampant consumerism but data still points to an increase in retail sales. Rising car sales are a factor, but spending has also increased on household goods and electrical equipment. That reflects a sense of economic confidence, even if many people feel they have yet to see the benefit.
Although the economy has regained the same level of overall activity as before the fall, income per head is still lower and the burden on individual taxpayers is a good deal higher. After years of uncertainty, however, growth is strengthening. At the same time, this has led to concern about the loss of competitiveness and high costs in the economy.
This comes as employment increases and unemployment falls, although the unemployment rate remains well above pre-crash levels. While some 340,000 people remain on the Live Register, a lot more people are at work than at the height of the crisis. Some 41,300 more were working in the first quarter of the year than in the same period in 2014. While pay dropped after recession struck, data also points to marginal earnings increases in recent times with more increases on the way.
A modest income tax cut this year increased spending power a little, as will the promise of another in 2016. Such measures must be seen through the prism of increased taxation generally. But the capacity to undertake these cuts reflects improved public finances as tax revenues rise and the gap narrows between the amount the Government spends and the amount it takes in.
The decline in the price of oil provides a further benefit, as it costs less to fill one’s tank. All this feeds into increased consumer spending which, in turn, provides a further spur to activity in the economy. While it’s not quite the frenzy of the boom, the pervading sense of caution in the crisis years has declined.
In economic parlance this contributes to what is known as domestic demand, the amount of money spent on goods and services within the State. Such activity intensified last year as the local economy stirred back to life.
The Irish people are still saddled with an enormous national debt, but the overall picture is improving steadily.