Ireland's Decline

C

CoffeeBrew

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Seems the only growth industry these days is the one that gets young people into massive debt.

Here's a summary from Dan McLaughlin's comments:

1. Manufacturing output declined by 1.7pc in the first three months and the multinational sector has been hit heavily.

2. The chemical and pharma sectors are particularly weak, suffering double-digit declines in output

3. A dramatic fall in the export of telecommunications equipment (26pc )

4. Computers exports dropping 7pc and organic chemicals down 4pc.


Despite this, the economy is still growing. Where are the jobs coming from ?

The number of people in employment grew by 72,400 in the 12 months to the end of March. A massive 30,800 were created in construction and a further 18,500 in the financials and business sector (Guess we need an army of people to process all the debt).

So basically the positive numbers being bandied about on the Irish economy are in large part deriving from factors that are transitory - record construction and record borrowing !

links:

Dan's talk on manuf recession:
http://www.unison.ie/business/stories.php3?ca=80&si=1418586

Job Stats:
http://www.rte.ie/news/2005/0609/cso.html

Bank Profits and Mortgage Growth:
http://www.unison.ie/business/irish/stories.php3?ca=80&si=1418589
 
I remember reading an article by in the independent a while ago (I think it was by Brendan Keenan) about how retail was now more important to the irish economy than semi conductors. It was just after the Dundrum shopping centre opened. Intel and semi conductors were the big success stories of the 1990s. Now that these industries are no longer in favour the chear leading economists we now have latch onto something else. The new growth area we are now told is "services". A catch all phrase that includes hair dressing, lawn care, garden improvements, wedding consultants etc. Hardly the stuff that sustained economic prosperity is based on. Is ireland and the West going to be able to maintain its standard of living on this when manufacturing and technology is moving east.
 
I thought that Viagra was still the most important product in our economy - at least as far as GNP rather than GDP is concerned! :eek:
 
ClubMan said:
I thought that Viagra was still the most important product in our economy - at least as far as GNP rather than GDP is concerned!
Click to expand...


China has nullified the Viagra patent and will compete with Viagra.

[broken link removed]

So I wouldn't get too excited , so to speak, about Viagra's growth, so to speak, in the far east.
 
A lot of the Jobs seem to be in construction. A downturn in that would probably hit growth rates (about which people seem obsessed) pretty hard.

According to the Tribune yesterday the Electoral Register is innacurate by a huge margin. Perhaps our Jobs figures are equally bad, could 30% of the jobs created last year have gone to dead people?

As umop said above, enjoy it while it lasts.
To which I'd add - work solidly towards an escape plan.

-Rd
 
Irelands largest exporter, Dell, is looking at setting up shop in Poland.

Dell exports are worth €8bn a year to Ireland - more than agriculture and tourism combined.

"Poznan (Poland) has an abundance of low-cost, skilled workers and has good infrastructure network linking it to mainland Europe"

There is not likely to be any immediate impact to Irish operations but "when the new plant is up and running Dell Limerick will have to compete against its Polish sibling for future investment.

In the longer run, the Limerick base will also have to battle for product manufacturing contracts within the group".

http://www.unison.ie/irish_independent/stories.php3?ca=185&si=1420095&issue_id=12646
 
Yea Ive just read the article. It just shows the distorting effect a few multinationals have on the irish economy. When one multinational exports more than our two biggest indiginous industries. It also shows that high tech manufacturing has a much bigger weighting on the irish economy than the numbers employed would suggest. Because of the 12.5% corporation tax multinationals try to export as much as they can from ireland. Much of the actual manufacturing may have occured in third countries but the finishing touches such as the "Made in Ireland" sticker get applied here. Believe me I have first hand experience of this.

I know that the only reason we have a balance of payments surplus is because of exports from multinationals. Multinationals deliberately exagerate the revenues they earn from their irish operations by suppressing the price of imported components from third countries thereby making maximum use of the 12.5% corporation tax.
 
Perhaps it's time for a quick update on the 'ol "dose of reality" thread.


Points to ponder:

There has been 18pc decline in corporation tax since last July suggesting a slowdown in the business sector and this comes at
time when the supply of office space in Dublin is set up surge.

57,000 sq m in 2004
70,000 sq m so far in 2005
200,000 sq m in 2006

Ireland's indigenous exports have hardly grown over the past decade.
Were US firms to drift abroad during the coming years, and they certainly have reasons for doing so, Ireland would rejoin the ranks of Europe's most impoverished nations.
(This according to Dr E Walsh writing in the SB Post)

30,000 industrial jobs have gone in the past four years and this year will be the first year in 20 years that industrial output
enters into a decline.


We have tens of thousands of foreign workers arriving here busy building houses and apartments which will be required for.... well for
more foreign workers building houses and apartments (to paraphrase Davys' Robbie Kelleher)


Fundamental problems are being masked by a booming construction sector with more than 250,000 related jobs and record levels of personal borrowing.
If the construction sector slows down, the volume of job losses could have a negative impact on the housing market. If this sector does not slow down, then supply will
impact the housing market. It seems that either way, property investment will be troubled in the coming years..
 
"Not reality yet - just a projection at the moment but maybe there's life in the oul' Tiger yet?"

Even Mr Celtic Tiger himself Bank of Ireland's Dan McLoughlin is sounding pessimistic. Now he is saying that interest rates will rise next year and that oil prices are hitting the irish economy. A month ago he was saying that The ECB would reduce interest rates "because of the depressed german economy" and that the euro would drop to 1.15 to the US dollar. The economist ran an article last week about the surprising recovery of the german economy. So it looks like "Dr Dan Mcloughlin" wrong on all counts. He is finally realising that the 1990s have ended.
 
joe sod said:
So it looks like "Dr Dan Mcloughlin" wrong on all counts. He is finally realising that the 1990s have ended.
Click to expand...
None of these people are right or wrong except in retrospect. Nobody can predict the future.
 
joe sod said:
The economist ran an article last week about the surprising recovery of the german economy. So it looks like "Dr Dan Mcloughlin" wrong on all counts. He is finally realising that the 1990s have ended.
Click to expand...

Eh just cos the Economist says it, it doesn't mean that its true - their track record on bubble identification hasn't been exemplary. By and large over the last 6-7 years Dan has been the Man in terms of calling the market (property and others).

Roy
 
onekeano said:
Dan has been the Man in terms of calling the market (property and others).

Roy
Click to expand...

"House prices in Ireland are finally responding to the scale of supply, and the era of double digit house price inflation may well be over"
Dr. Dan McLaughlin, July 2005.


And keep in mind that Dan is known to be one of the more optimistic economists.

Private sector rental yields have gone through what can only be described as a collapse in the past few years. The investors who have been rushing into the market are doing so in the hope of decent capital appreciation.

With capitial appreciation following yields downwards I would say we are entering into unchartered territory with risk on the increase.
 
CoffeeBrew said:
And keep in mind that Dan is known to be one of the more optimistic economists.
Click to expand...
Predicting that double digit growth is near an end is not necessarily predicting a crash. In any case, you know my views on predicting the future one way or another...
 
ClubMan said:
Predicting that double digit growth is near an end is not necessarily predicting a crash. In any case, you know my views on predicting the future one way or another...
Click to expand...

I don't think you need to be "Mystic Meg" to acknowledge increasing risks in property investment if capital appreciation and yields have been falling. ;)
 
"mystic meg" sat on the lottery show every week and never won it, what would she know
 
I think the key fault in the irish economy currently is that there is so little domestic control of it. Of course with globalisation every country has less control over its own destiny. But because Ireland has given away all the levers to steer its own course it is one of the most vulnerable countries in the world now. This is also the reason for the celtic tiger over the last decade, international conditions have been largely favourable to ireland, booming american economy, low interest rates, low oil prices up to recently. If Ireland had maintained more control domestically over its economy the celtic tiger would have been much more muted possibly similar to the boom in the sixties and seventies. But the international winds are changing and are going to blow away all the froth of the last ten years. It is then we will realise how domestic irish industry has hardly grown in the last ten years. How Irelands technology is largely foreign owned with virtually no migration to the indiginous sector. In other words all the things we took for granted about the celtic tiger are not anchored in this country but will blow to new destinations as the international winds change. Then we will have to start from scratch all over again
 
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