The Hot Topic

SPOTLIGHT ON INFLATION

Eurostat released sobering data on Ireland in recent weeks. First of all, it estimated that inflation here reached 9.6% in June, compared to 8.6% across the overall eurozone. The EU’s statistical agency also published a report which highlighted that the highest price levels for consumer goods and services among EU member states in 2021 were observed in Ireland and Denmark, which were both 40% above the EU average. On July 7, the Central Bank of Ireland forecasted that inflation here will peak at 10% in the third quarter before falling back.

THE HOT TOPIC Rising Costs

Commentary and findings on economic uncertainty and concerns for business

John Shorten

“Our research shows that despite uncertain economic times, Irish enterprises are pursuing ambitious growth plans. e power of digital infrastructure is enabling organisations to establish a virtual presence that allows them to bring their services and data closer to the end user almost anywhere in the world. It now looks inevitable that soon we will see virtual expansion becoming the de-facto method of scaling up operations. As our homegrown enterprises continue to expand, this level of interconnectedness is opening up an exciting era for Irish businesses and one that they seem increasingly prepared for.”

John Shorten, Senior Director of Operations for Equinix Growth and Emerging Markets, commenting on the Equinix 2022 Global Tech Trends Survey, which showed that 62% of Irish companies plan to forge ahead with expansion despite economic concerns

Services sector weighed down

The latest AIB PMI survey on the Irish services economy shows that activity increased at the slowest rate of the year so far, while new business grew by the least since January. Business expectations dropped further, weighed down by inflation concerns and geopolitical instability linked to the war in Ukraine. Input prices and charges both rose at the fourth-fastest rates on record. However, employment growth remained strong despite easing to a five-month low. “Businesses continued to experience severe upward pressure on input prices. This in turn saw prices charged to customers rise very sharply for the fourth consecutive month,” said Oliver Mangan, AIB Chief Economist.