It is now abundantly clear that the collapse in the housing market has led Ireland into virtual recession, culminating in plummeting consumer confidence and retail sales.
Our economy is now beset by slipping sales, rising unemployment, faster than anticipated increases in consumer prices and much tougher lending criteria for borrowers. These all point the way to a very difficult time in the months ahead.
For example, retail sales are down 1.6 per cent, according to the Central Statistics Office, with several leading stores such as Brown Thomas, Clery’s and HMV running sales mid season.
Pat McArdle, chief economist at Ulster Bank, said: “I was in Brown Thomas on Grafton Street last weekend and there was a ’25 per cent off’ sale, which I found very unusual.”
The Sunday Independent sought comments from the stores named above but they refused to say why sales are currently being held.
Car sales are also down significantly, with the number of vehicles sold in April 2008 down 20 per cent on the same month last year. Overall, sales are down 9 per cent since Jan 1, but several leading manufacturers such as BMW, Volkswagen and Mercedes Benz are expecting an upsurge later in the year once the VRT deadline passes. For the four months to April, 106,000 new cars were sold in Ireland compared to 117,000 in the same period the year before, a drop of 9.3 per cent.
Several Dublin car dealerships were contacted about the slump in sales.
“We’re going through tough times. These are bad times and everyone knows about it. Everyone is writing about them and I don’t want to be a part of it,” said one dealer who did not want to be identified.
Other dealerships simply refused to comment.
The drop in consumer confidence is largely down to the weakened position of household wealth, increased consumer fears about future financial difficulties and the slowdown in the growth in employment, which is almost at a standstill at present.
Another huge cause for concern this weekend is the spike in oil prices to $135 a barrel.