Still down in the dumps after getting shafted in the Budget? Here’s some cheerier news.

Although we’re far from out of the woods yet, the darkest days look behind us as light is finally beginning to peep through the global economy, especially at the epicentre of the banking collapse - the US economy - vital to the interests of export-sensitive Ireland. Sure, there are still lots of minuses but at least now we’re seeing the positives finally beginning to gather some fragile momentum. So let’s start with the minuses:

Minuses

• Much like in Ireland, US house prices are likely to fall another 10% to 15% before hitting the bottom. Result – more negative equity
• Unemployment continues to rise but the pace is slowing 10% to a little over 600,000 per month. Result- less workers spending money
• Loan losses, defaults, bankruptcies and repossessions continue to rise. Result- more loan write-offs, bailouts and misery
• Retail sales are weaker than expected and industrial production is feeble. Result diminished sales, more saving less spending

Pluses

• Housing affordability is at historic highs, just like here, thanks to lower borrowing costs. Result; Increased incentive to buy in large numbers as the price bottom nears.
• Manufacturing orders are rising, consumer expectations strengthen, and US trade imbalance is narrowing. Result; Confidence is improving albeit slowly.
• Interbank lending, where the heart attack started, is now stable for three months. Result; the credit crunch is thawing a little.
• Weathervanes like General Electric, JP Morgan and Google have surprised with strong first quarters. Result; some corporate earnings are already improving and investors are returning.
• Some big companies are once again able to raise capital in debt markets. Result; Less risk perceived in corporate debt markets, a vital lifeline to big employers.
• Sensing some real evidence of stabilisation, stock markets have recorded several weeks of gains. Result; While fears of a sharp reversal in May remain high, the absolute floor could yet prove to be March 6th, allowing pension funds and investments to begin the long road to repair.
• Chinese retail sales boomed in the first three months keeping China’s growth above 6%. Result; Chinese consumer demand has defied results elsewhere.
• Despite falling exports Europe’s muscular German economy is recording improved business and consumer confidence.

Result; The world’s third largest exporter seems to be unfazed.

After many months of turmoil the overall position now looks to be stabilising. Even the most pessimistic forecasters are downgrading the risk of depression as expectations are now growing that the US will pull out of recession within the next 3 to 8 months. Of course it’s not written in stone but Obama wasn’t playing small town politics with the US economy when the American President recently said that green shoots are appearing and it wasn’t just from the shamrocks Brian Cowen gave him.

Unquestionably the US, European and UK economies upon which Ireland relies to kick start an export-led recovery, will each record negative growth this year but the signs are growing that we may be over the worst. That means 2009 may go down in history as both the year the recession hit its worst point and the year the recovery began.

So, expectations that Ireland will flat line next year but begin to grow again in 2011,may not be unreasonable. The speed of the Irish recovery may yet surprise critics especially if Government finally hit the last tackle bag – wasteful public spending and the Euro weakens a little against the Dollar and Sterling to aid our competitiveness.

Time to light those votive candles and pray that the recovery will be sustained and not simply the first leg in a W-shaped bust, boom, bust story.