Business This Week : Focus firmly on economic indicators

MONDAY

Indicators: Euro zone business and consumer confidence (March), economic, industrial and services sentiment (March), consumer inflation expectations (March); UK consumer credit (Feb), mortgage lending and approvals (Feb), consumer confidence (March); German inflation (March); US pending home sales (Feb).

Consumer confidence

It is unsurprising that a flash look at European consumer confidence earlier this month found levels had “plummeted” by five points in the euro zone and by 4.5 points across the wider EU. Full results for the euro zone business and consumer surveys are to be published on Monday, and, as is now the norm, they will tell the story of coronavirus and its disruption to global economies.

A short preview of consumer sentiment found that at a rate of -11.6 points, “the indicator for the euro area now scores below its long-term average of -11. The indicator for the EU fell to its long-term average of -10.4”.

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As if that were not ominous enough, it qualified the flash report by noting that “only approximately 15 per cent of consumers’ responses were collected after strict confinement measures were taken in the individual countries”.

TUESDAY

Results: Trinity Biotech.

Indicators: Irish unemployment (March); euro zone inflation (March); UK current account (Q4), GDP growth (Q4), business investment (Q4); German unemployment (March), import prices (Feb); US consumer confidence (March).

Irish unemployment figures

In the weeks ahead a dearth of corporate news means that the focus is going to be on various economic indicators, particularly in Ireland and the EU. This is not only because events and company activities have been hugely disrupted by the Covid-19 crisis, but because the consequences will be reflected most acutely in economic data.

On Tuesday. for instance, the Central Statistics Office is due to report on Irish unemployment for March. For a long time employment, a key indicator on the health of Irish society, has been surging upward with much of the commentary around when the State would hit the so-called "zero unemployment" rate. The situation today could not be more stark in terms of juxtaposition.

People have been forced out of employment rapidly in recent weeks, with the ESRI last week warning that the labour market is set to face the largest shock in a single quarter in living memory – with the unemployment rate soaring potentially to 18 per cent.

How will March compare to February? For that month the CSO reported the seasonally adjusted unemployment rate at a very healthy 4.8 per cent, unchanged from January and down from 5 per cent in February 2019.

The seasonally adjusted number of persons unemployed was 120,100 in February 2020, compared to 119,700 in January 2020.

Ireland created about 330,000 jobs in the last five years, an impressive measure of economic muscle. However, Neil Gibson, economist at EY Ireland, recently told the Financial Times that the State could see as many as 350,000 people out of work as a consequence of the ongoing public health crisis. Much of the hurt has been felt in the shuttered childcare sector, hospitality and, most recently, retail following the closure of "non-essential" shops.

That ESRI report said the Irish economy will fall into recession with a potential contraction of over 7 per cent in GDP. This scenario will be illustrated in various economic data in the weeks ahead.

WEDNESDAY

Indicators: Irish manufacturing PMI (March); euro zone manufacturing PMI (March), unemployment (Feb); UK manufacturing PMI (March); German retail sales (Feb), manufacturing PMI (March); US manufacturing PMI (March), construction spending (Feb).

Meetings: ECB non-monetary policy meeting.

THURSDAY

Indicators: Irish live register (March); euro zone PPI (Feb); UK construction PMI (March); US exports and imports (Feb), factory orders (Feb).

FRIDAY

Indicators: Irish services PMI (March); euro zone services and composite PMI (March), retail sales (Feb); UK services and composite PMI (March); German services and composite PMI (Mar); US non-farm payrolls and unemployment (Mar), average hourly earnings (March), services and composite PMI (March).