Central Bank Publishes Two Research Papers Using Real-Time Data On Economic Impact Of Covid-19

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  • The Central Bank of Ireland is working to develop a number of real-time indicators of economic developments during the current crisis.
  • In Ireland, by 3rd April, job postings on Indeed were almost a third below those observed in previous years.
  • Card spending in the first week of April declined by almost one-third with ATM withdrawal amounts down 57% compared to the first week of March.

The Central Bank has published two separate research papers on the economic impact of the Covid-19 pandemic using real-time economic data. The first paper examines the effect of the pandemic on job postings, both globally and in Ireland, while the second examines the impact on retail card usage in Ireland since the onset of the Covid-19 crisis. The Central Bank of Ireland is working to develop a number of real-time indicators of economic developments during the current crisis.

An Economic Letter, written collaboratively by Central Bank of Ireland economist Reamonn Lydon and Indeed economist Pawel Adrjan, uses data taken from Indeed to give a real-time indicator on the impact of the Covid-19 pandemic on the labour market both globally and in Ireland, and which sectors have been most affected. In Ireland, by 3rd April, postings were almost a third below those observed in previous years. The paper finds that job opportunities are falling fastest in occupations that are directly exposed to the restrictive measures to fight Covid-19, such as Beauty and Wellness (80% decline) and Hospitality & Tourism (76% decline).

Countries with a higher share of employment in these occupations – such as Ireland and the UK – have seen some of the largest declines in online job postings on Indeed. The authors find that job postings have generally fallen by 30% to 40% in countries with a higher proportion of employment in occupations with lower work-from-home potential. This includes Ireland, the UK, Portugal, Spain, Canada and Australia – where the percentage of employment in lower work-from-home occupations ranges from 50% to 60%.

In a separate “Behind the Data” research paper, Central Bank economists Andrew Hopkins and Martina Sherman use real-time data to examine the developments in retail card spending in the weeks after the first confirmed case of Covid-19 in Ireland.

Spending activity on cards initially increased by 790,000 additional transactions, or 22%, on Thursday 12 March, relative to the average of the previous 11 days, as multiple media outlets reported bulk buying following the Government announcement the same day. The value of both card spending and ATM withdrawals declined rapidly from Monday 16 March. By the time the stay-at-home order was announced on 27 March, the value of card spending had already declined by over one-fifth since the first week of March, while the value of ATM withdrawals was down over 40%.

This pattern of declining spending and cash withdrawals continued into the first week of April, with card spending down by almost one-third and ATM withdrawal amounts down 57% on the first week of March. If the current level of spending and ATM withdrawals were to continue for the remainder of April 2020, it is estimated that overall card spending and cash withdrawals would be €2.6 billion (or 40%) lower than in comparison with April 2019.

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