Irish economy - are there clouds ahead?

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autumnleaf

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I've been lurking around the boards and there seems to be a lot of negative sentiment about the current direction of the Irish economy. From my naive point of view, there do seem to be clouds on the horizon. Too much of the economy tied up in property and multinationals, lack of successful native industry, rubbish transport infrastructure, massive amounts of personal debt.

So what I'm asking is:
- Do you think the Irish economy is heading for a meltdown?
- Is there anything that can be done on a large-scale level? (invest in infrastructure, diversify industrial base, offere incentives for small local businesses, etc.)
- If a meltdown is inevitable, can an individual do anything to cushion his/herself against it? (pay off debts, sell holiday home, change to a job that can't be moved to Bangalore, etc.)
 
while no expert myself i personally belive selling holiday home and paying off debts (in particular) will greatly help cushion anyone against a downturn in the economy

re: what the government can do , they should really utilise enterprise ireland a hell of alot more so that they can aim funding at "smaller" operations , i run 2 small businesses and both times had to fund it myself / from bank has enterprise ireland weren't interested unless it had high growth / profit potential which is a bit retarded IMHO as it's kind of like shooting yourself in the foot long term

actually , for the very reasons above i haven't voted for (and will continue to not vote for) fianna failure
 
Hi

Yes i agree, there is a few worrying sign's to the Domestic economy, Not just that we rely so much on foreign investment..etc. there isn't many new big Irish companies, investing at home ( lots of Investment money going abroad ) - great for shareholders, no problem with that..of course.

But future problem's in the Political arena here, and abroad will knock the confidence of consumers etc.
 
Inflation, inflation, inflation ...

It should be the number one fear for the economy in the future because it will effect absolutely everything and make us uncompetitive even if it doesn't lead to massively increased wages. In Ireland right now it is rapidly running out of control.

Also the question of how the country is going to foot the ridiculous public sector bill when we finally stop topping up the exchequer with all that stamp duty.

As for what the country could do I think it is getting too late to act now but we should have made much more of the boom years ...

Investment in local business, R&D, education and health, introduce competition in utilities such as telecoms and electricity, reduction of reliance on foreign oil and gas, also on multinationals to produce exports ...
 
Foreign direct investment from multinationals is not the problem, or even a problem. It is a very efficient sector of the economy. The problem is that we are doing everything we can to drive that investment out of the country.
The problem is that the building and domestic services sectors are driving prices up and efficiency down and will continue to do so for the foreseeable future.
Internationally traded goods and services are what made this economy and the Enterprise, Trade and Employment department (and Enterprise Ireland) are rightly focusing on growing them. The problem is that the rest of the government is doing all it can to screw things up.
 
[broken link removed]

If you'd like to take a little look at this you'll see just how much trouble were in,pay particular attention to the IRISH owner exports in the graph shown and how bad it is !

As Mr Pulrple said,this government is doing everything it can to drive up prices in all the sectors it has some influence,thereby eroding competitiveness and speeding up the relocation of foreign multinationals.

If ever there was a case of killing the goose that laid the golden egg,this government are the experts in it.They should look at what happened to the publicans !;)
 
How many irish owned and based companies do you know employing significant numbers of people and providing services to overseas customers?? the profits from the multinationals dont stay in ireland and many of them wont stay here either when the benefits(largely tax) dont outweigh the costs.
 
bearishbull said:
How many irish owned and based companies do you know employing significant numbers of people and providing services to overseas customers?? the profits from the multinationals dont stay in ireland and many of them wont stay here either when the benefits(largely tax) dont outweigh the costs.
Click to expand...

The only really Irish-owned companies are private like The Quinn Group and Dunnes Stores or state owned like Aer Lingus. Any large public company is likely to have an international mix of shareholders who are naturally interested in shareholder value rather than the unemployment rate in Ireland.

The Irish economy is flexible and could turn on a sixpence. I´m not sure this is necessarily a good thing though. The growth sector was technology a couple of years ago, now it is construction and financial sector. All this flexibility could lead to more volatility.
 
Would it be fair to say that its not all doom an gloom re the financial sector? I mean, it seems there will be a massive revenue gain for the banks in the medium to long term with the quantity of personnel debt out there.

The next big invesment?
 
Itchy said:
Would it be fair to say that its not all doom an gloom re the financial sector? I mean, it seems there will be a massive revenue gain for the banks in the medium to long term with the quantity of personnel debt out there.

The next big invesment?
Click to expand...

If/When there is a property downturn/crash,most of the irish banks are highly exposed.Their not going to reposess ppr's but what the hell are they going to do with all them investment properties mainly apartments that they may get stuck with ?

At the end of the day the overvalued irish property market is going to kill this economy at some stage.I know and i'm sure most people on this site know people with 1/2/3 investment properties,who do not have the resources(rainy day fund) to sustain themselves even with a very short period of non rental income (3/4/5 months).At that stage you can either try and sell or default and let the bank take the property back.There is more and more property coming on line,things are only going to get more difficult from the investors/speculators point of view,something like 40% of the properties bought in the first 3 months of this year were by investors/speculators !.
 
dontaskme said:
The only really Irish-owned companies are private like The Quinn Group and Dunnes Stores or state owned like Aer Lingus.
Click to expand...

This highlights the crux of the problem. We do not really export much ourselves and most Irish firms (with a few notable exceptions) exist primarily to serve Irish demand. So the country derives most of its income by being an export base for large foreign multinationals - particularly technology based companies.

In the event of a downturn in the Irish economy, this leaves the country in a precarious position. While FDI is of course welcome, we should have used the money coming in during the boom years to build our own export base.

In the past five years the amount Enterprise Ireland has invested in seed and venture capital for Irish companies is less than half a percent of the amount Irish investors have ploughed into foreign property (€133 million vs. €30 billion)!
 
bearishbull said:
How many irish owned and based companies do you know employing significant numbers of people and providing services to overseas customers?? the profits from the multinationals dont stay in ireland and many of them wont stay here either when the benefits(largely tax) dont outweigh the costs.
Click to expand...

Paddy Power, C&C, Ryanair, NTR (Airtricity, Greenstar, Bioverdia) .....

There are plenty, just not traditional manufacturing types.
 
Howitzer said:
Paddy Power, C&C, Ryanair, NTR (Airtricity, Greenstar, Bioverdia) .....

There are plenty, just not traditional manufacturing types.
Click to expand...
how many do they employ though? theres a load of small ones ,many irish banks provide services to foreign customers/companies but the amount of employment isnt huge. ireland exports services of around 45billion abroad but are a net importer of services by around 9 billion,of that 45 billion majority is produced by foreign multinationals who get the profits and not ireland.
 
thewatcher said:
If/When there is a property downturn/crash,most of the irish banks are highly exposed.Their not going to reposess ppr's but what the hell are they going to do with all them investment properties mainly apartments that they may get stuck with ?
Click to expand...

I think the exposure of the Irish banking sector to the Irish mortgage market is somewhat overblown.

Irish banks have securitised a massive part of their loan books over the last 3 years, and continue to do so almost monthly - e.g. .

This spreads the risk to the international markets, thus lessening the impact on say a Bank of Ireland or PermanentTSB.
 
Sherman said:
I think the exposure of the Irish banking sector to the Irish mortgage market is somewhat overblown.

Irish banks have securitised a massive part of their loan books over the last 3 years, and continue to do so almost monthly - e.g. .

This spreads the risk to the international markets, thus lessening the impact on say a Bank of Ireland or PermanentTSB.
Click to expand...

Interesting stuff. Some questions on this though.

Ok so IL&P reduces its exposure by selling the rights to a mortgage portfolio. How do we know that international investors are not getting cherry picked loans leaving IL&P with the riskier ones?
(e.g. tables shows the weighted average LTV of the portfolio to be a nice 63.2% with a majority being fixed term)

What does this say about risk of repossesions in a downturn given that it
is an overseas entity that holds the rights to an Irish mortgage portfolio?

Also in this case IL&P raises a couple of billion by selling the rights
to a mortgage portfolio. What do they do with the money ? Well they put it straight back into the property market of course !
 
Hi.
I think it is about time, Government and interested groups, tried to figure out exactly - to what extent large foreign companies, have on inflation here e.g. on rising - housing and rent, Electricity and water charges, also refuse and recycling increases, not to mention service charges ...etc. Some employ more, temporary overseas workers ( 50% or more ) adding to congestion and commute time also.

Lots of these charges are being passed on to consumers. We have given them enough - state aid, Grants over the past 20 years.

We hear about Growth figures daily, but what about huge increases in our - Deficit in infrastructure ..etc. At least - 80 Billion, needs spending over the next 10 years, and even longer im sure, by the time we have caught up to the level of some "real rich" developed E.U. countries. Especially on " Public Services" Schools, Hospital and health Care, Sport facilities & Community centres not to mention updating our Rail network...etc.

We have a 2 speed economy .. ( more like a 5 speed :)
 
Ipso_facto said:
Hi.
I think it is about time, Government and interested groups, tried to figure out exactly - to what extent large foreign companies, have on inflation here e.g. on rising - housing and rent, Electricity and water charges, also refuse increases ...etc. Some employ more, temporary overseas workers ( 50% or more ) adding to congestion and commute time also.

We hear about Growth figures daily, but what about huge increases of -deficit in infrastructer ..etc. 80 Billion, by the time we have caught up to the level of some "real rich" E.U. countries.

We have a 2 speed economy .. ( more like a 5 speed :)
Click to expand...

Yeah, Johnny Foreigner is the source of all our problems :rolleyes: .

Rising wages are caused by a) a booming economy with virtually full employment - the arrival of foreign workers will only serve to lessen inflation in such regard, and b) ridiculous wage demands by unions acting in concert with idiotic IBEC and Bertie.

We sure do have a two speed economy - the private sector (and most honest, hard-working immigrants) are going full speed ahead. The public sector, and the unionised Irish workforce, are stuck in reverse.
 
Sherman said:
Yeah, Johnny Foreigner is the source of all our problems :rolleyes: .

Rising wages are caused by a) a booming economy with virtually full employment - the arrival of foreign workers will only serve to lessen inflation in such regard, and b) ridiculous wage demands by unions acting in concert with idiotic IBEC and Bertie.
Click to expand...

Johnny .. who ? - them is your words, not mine ok. Well obviously they ( continual influx of temporary overseas workers ) contribute to inflation in - housing and the rental sector.

But i was mainly suggesting companies like Intel or pharmacuitical Co.for example, have enormous energy needs and extra demands on the water supply ...etc, Hence - recent increases to the consumer here, and more to come in the future ( are businesses paying their fair share or even the true cost of utilities ) Maybe Gov. departments should take a closer look at some Co. in the Industry sector ..etc

I don't mean to be argumentative or anything, Sherman ok.
 
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