Irish economy - are there clouds ahead?

[RiceCakes]

Dell have about 1500 marketing and sales people in Cherrywood Science Park in Dublin whom I imagine are on average better paid on average than most in Limerick.
Can't see it being cheaper to move these money generators to somewhere else, at least in the short term.
Limerick is going to shrink no question imho, but the Dublin jobs are reasonably safe as is the huge revenue they generate of the Irish economy.
My heart goes out to the Limerick employee's, manufacturing in Ireland is becoming less and less viable by the year with huge land and wage costs compaired to the new EU entrants such as Poland. They have worked incredibly hard to make a manufacturing plant - the most efficient in the world apparently for the type of work they do, but simple raw cost will be their undoing probably in the next 5 - 10 years.

 

[CelloPoint]

Interesting article about the changes in the Irish economy (Irish Independent):

The drivers of economic growth are a-changin'

 

[autumnleaf]

This Dell business is looking like the thin end of the wedge, you might as well abolish Limerick if Dell packs up.

Didn't they say the same about Galway after the Digital layoffs way-back-when?

 

[Contrarian]

Digital did'nt employ 4000 people, it would be devastating to Limerick if Dell disappeared.

 

[phoenix_n]

Didn't they say the same about Galway after the Digital layoffs way-back-when?

Yes didnt they call Salthill the porridge estate or something as that is what (not literally of course) people could only afford to eat!

 

[Bedsit]

Looking at the various stories on the ECB rate hike today (http://news.google.com), it looks like that most economists have taken today's comments by the ECB chief as being hawkish. I guess that means that they are still looking at two further rate hikes this year

 

[soma]

Looking at the various stories on the ECB rate hike today (http://news.google.com), it looks like that most economists have taken today's comments by the ECB chief as being hawkish. I guess that means that they are still looking at two further rate hikes this year

However a few of those articles imply that the ECB will pause or be unable to (due to a possible recession) raise rates in 2007. I wonder how plausible that scenario is.

 

[Afuera]

However a few of those articles imply that the ECB will pause or be unable to (due to a possible recession) raise rates in 2007. I wonder how plausible that scenario is.

If the ECB had to choose between maintaining economic progress or maintaining price stability, I'd say they'll go for price stability every time! Their whole reason for existence would be thrown into question if they let inflation get out of control. I'm under the impression that they see economic progress as being the reign of the various governments in their respective countries.

 

[Remix]

US and UK are in a much more difficult position. Interest rates need to rise but there's a real risk of bringing about a hard landing in their respective property bubbles.

The ECB, on the other hand, has no property bubble to worry about in Germany.

There might be a rude balloon deflating sound coming from the Irish side of the zone though.

 

[whizzbang]

There might be a rude balloon deflating sound coming from the Irish side of the zone though.

Spain as well I'd say.

 

[Bedsit]

Spain as well I'd say.

That could be a serious double whammy for some people who may own Spanish investment property.

 

[room305]

That could be a serious double whammy for some people who may own Spanish investment property.

Yeah, especially if they are not tax compliant on the Spanish villa as well. Spanish revenue going after foreign property owners in a big way.

 

[SidTheDweeb]

Quite strong suggestions from analysts that the ECB rate will rise to 3.5% by year end and pause there.
This is quite interesting as it's not as significant an increase as quite a few posters on here have believed... maybe a topic should be set up for where people think ECB rates are headed...

 

[room305]

Quite strong suggestions from analysts that the ECB rate will rise to 3.5% by year end and pause there.
This is quite interesting as it's not as significant an increase as quite a few posters on here have believed... maybe a topic should be set up for where people think ECB rates are headed...

I think there is an interest rate thread. Might be an idea to post this comment there, maybe with a link. I'd be curious to know who is doing the analysis. I personally think we'll go much higher before settling back to a base rate of about 4.5%

 

[Remix]

Quite strong suggestions from analysts that the ECB rate will rise to 3.5% by year end and pause there.
This is quite interesting as it's not as significant an increase as quite a few posters on here have believed... maybe a topic should be set up for where people think ECB rates are headed...

Trichet said very clearly today that he considers inflation risks are to the upside throughout 2007.

Can't see them suddenly stopping with rate hikes in 2006 if that's the case.

A safer assumption - at this point - based on Trichet's statement would be to expect interest rate increases throughout 2007.

 

[autumnleaf]

Spain as well I'd say.

I've heard there's been something of a property boom in Spain as well, partly fueled by foreigners buying up holiday homes and partly because, like "the big European islands" but unlike most of continental Europe, the Spanish have a home-owning culture. But how much is the Spanish economy dependent on construction?

 

[room305]

But how much is the Spanish economy dependent on construction?

A lot.

 

[bearishbull]

Extract sunday times
""The largely sunny economic picture has masked hard times in the traded sectors of the economy. Merchandise exports have fallen over the past four years, while some 30,000 jobs have been lost in the manufacturing sector.
Exports increased by 160% between 1995 and 2001 but by 2005 the value of exports was 5% below the 2002 level. This decline has occurred at a time when the global economy has performed very strongly.
A loss of market share is a danger sign for any company and the same goes for countries. The reduction in Ireland’s share of total European Union exports from 9.5% in 2001 to 7.5% in 2005 should signal something of a crisis for Irish business. Amid all the euphoria about rising house prices, special savings incentive accounts (SSIAs) and buoyant consumer spending, it has almost gone unnoticed that the traded sectors of our economy are in recession. ""

 

[Marie]

What a relief to at last hear the "r" word ("recession") in manufacturing sector. The timescale in this excerpt vindicates my advice to younger family members since 2001 (a good number of whom work in the hospitality and leisure industry) that they should avoid complaicence in terms of their financial commitments as the service sector would be next to be hit..........and it will occur very quickly.

 

[cooked]

temporary overseas workers ) contribute to inflation in - housing and the rental sector.

Two eastern european girls who work in my local supermarket are pregnant. I got to wondering do they plan to return home to have their babies or stay? Are they in a relationship with an Irish national? Migration may not be temporary or simplistic - its human beings that are involved after all not just workers.

No-one has any idea what is going to happen in three years time let alone ten. Its a big sociological experiment and no-one can be sure of the outcome.

( Not a uselful sample size I know )