Consumer spending rose 3.1 percent in the fourth quarter from the year earlier, while government spending dropped 6.8 percent. Exports rose 16 percent in the three months ended in December from the year-earlier period while imports rose 15 percent. Investment rose 28 percent.

“Clearly these numbers are a strong upside surprise and we would not extrapolate forward to 2016,” Cantor Fitzgerald LP in Dublin said in a note to clients. “Multinational sector activity distorts the investment numbers.”

 

Eoin Treacy's view

The Irish economy took some heavily losses and instituted drastic fiscal reform in the aftermath of the credit crisis. Helped by a fluid workforce, low corporate taxes and an export oriented manufacturing sector that has benefitted from the weakness of the Euro, the economy is once again one of the fastest growing in Europe. 

As an island nation with a small population Ireland has not done a particularly good job of controlling inflation. Housing prices have rebounded and wages are now rising so this is likely to continue to represent a challenge for policy makers. Here is a related article from the Irish Times: 

According to the study, some 50 per cent of private sector employers said they would be providing increases of 2.7 per cent in 2016, while 37 per cent indicated they were offering pay increases as a counter-offer to employees planning to leave their organisation.

The survey also shows 47 per cent of companies plan to increase their workforce their workforce this year with just 8 per cent planning on reducing employee numbers.

The ISEQ Index tripled between 2011 and late last year. However it experienced a sharp pullback in January and retreated from the region of the 200-day MA today. It will need to hold the low near 5500 during this pullback if ranging and consolidation earlier gains are to be given the benefit of the doubt. This action suggests a great deal of the positive news reported above may already be in the price so period of convalescence is likely even in a bullish scenario.