Ireland’s economy expanded by almost 5% in the first three quarters of 2014 and GDP is now only 1.7% below the prerecession peak in 2007. The recovery has had two distinct phases. Firstly, driven by improved competitiveness, the initial phase was led by exports growth. More recently, fuelled by strong jobs growth, domestic demand has also begun to contribute. As a result, aggregate disposable incomes are now rising again, and this trend will gather momentum as the tightening labour market drives earnings growth and provides more scope for fiscal easing.
Net employment growth of over 100,000 since Q1 2012 has contributed to 14 consecutive months of positive retail sales figures, and this had had beneficial effects for the wider economy. A more rapid flow of goods has led to a big increase in commercial vehicles being licenced for the first time – 16,254 in 2014 up from 11,024 in 2013. Likewise it has driven the demand for logistics space. Total take up of industrial space in Q4 2014 was over 130,000 sq m – 40,000 sq m higher than the previous quarterly record. Although some of this activity reflects a rush to complete sales before the Capital Gains Tax incentives expired in December, more than one third of deals were lettings and the underlying trend has been positive throughout all quarters of the year; approximately 320,000 sq m of industrial space was contracted in the full year – again a new record for the Dublin market.
Source : Savills