Market Pulse Report Q4 2024 - Fitzgerald Power

Market Pulse is an analysis of the key trends in the SME sector, prepared by Fitzgerald Power on a quarterly basis. Check it out here.

Irish Economy

The Central Bank Quarterly Bulletin for Q4 2024 states that economic activity and employment grew at a solid pace in 2024, with the economy operating near its sustainable capacity. Modified Domestic Demand expanded by over 3%, supported by 2.8% employment growth and a low unemployment rate of 4.5%, though risks of overheating persist. Rising disposable incomes, supportive fiscal policy, and easing monetary constraints are set to boost MDD growth to 3.1% in 2025 and an average of 2.5% in 2026–2027. Despite weak external demand, strong pharmaceutical and ICT exports continue to contribute to economic growth.

Global Economy

In Q4 2024, the global economy grew steadily, with easing inflation, sustained consumption, and looser monetary policies in key markets. However, growth faces challenges from rising geopolitical risks and policy uncertainty. The OECD expects global GDP to grow by 3.2% in 2024 and 2025, with inflation falling to 3.8% in 2025.

Housing Market

Irish house prices are overvalued by 8-10%, raising concerns of a “painful correction,” according to the ESRI. Prices are now 13% above the 2007 peak, with annual growth at 10%, driven by supply shortages, population growth, and real wage increases. Despite demand for over 50,000 homes, completions were approximately 33,000 for 2024, with potential for 40,000 in 2025 due to housing commencements. Elevated mortgage debt and relaxed lending rules further heighten financial risks, prompting calls for vigilance in macroprudential policy.

Trump’s Return

The latest economic analysis from Goodbody warns Donald Trump’s return to the White House poses Brexit-level risks to Ireland’s economy, citing potential US tariffs and corporate tax changes. The US accounts for 72% of Ireland’s foreign direct investment and 83% of corporate tax receipts, making Ireland highly vulnerable to policy shifts. Policymakers are urged to ensure fiscal stability by targeting balanced budgets and investing in infrastructure. Despite these risks, consumer spending remains strong, with low unemployment, rising wages, and falling inflation driving positive trends.