Booming economy coming to an end?

junkyard

I've just been talking to a few people I know and they're convinced the booming economy we've been used to has come to or is coming to an end. The people I spoke to are in the service end of things, i.e. shop keepers, auctioneers and builders, and I'm seeing it myself in the motor trade. Is anyone else experiencing a similar downturn country wide or is it just around my area. I heard on the radio a few days ago that 89% of the population is relying on the construction industry, directly or indirectly, its a scary thought if this is actually the case. Has anyone any thoughts on the matter?:(

Dave!

I don't think it's much of a revelation that Ireland is too relient on the construction industry, mate! I don't think it's as grim as the picture you paint though. But you're right, the good days can't last forever!

shane86

The economy has apparently been at "ooh its gonna be ****ed next year" stage since at least 2000. September 11th was meant to be sending us to a level that made Thatchers Britain look like Hitlers 1930s Germany (economy wise ). 5 years and half of Eastern Europe working here later and we`re still on top. Tbh id say its still a long way off. Same with the house price crash, its been "coming" for 5 odd years now.

daveirl

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vector

I'm not an economist but...

as we enter winter things slow down (apart from the christmas rush), so if figures are to be produced lets compare October 2006 with October 2005 (ie year with year), and not October 2006 with July 2006 (ie Winter with Summer)

Baby4

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Afuera

junkyard wrote:

I heard on the radio a few days ago that 89% of the population is relying on the construction industry, directly or indirectly, its a scary thought if this is actually the case.

I don't think it's as high as 89% reliance on construction. I thought that there were about 15-16% of workers directly employed in construction and then another 5-10% in related industries (real estate, insurance, mortgage lending, etc). There may be a multiplier effect that would increase it by another few percent but I think 89% is stretching it too far. As it stands though it's still incredibly high for any country. Any slow down in construction will severely affect the economy in Ireland.

junkyard wrote:

Has anyone any thoughts on the matter?:(

I think that we are too tied to the American economic cycle. It's increasingly looking like they might be facing a recession there so if that happens we can probably expect a knock on effect here as well. It might be a good time to reduce any outstanding debts and diversify a little bit.

jank

2007-2007 is when we will see the real down turn.

Its not going to be pretty, but i think it nessesary as we have grown too cocky getting high of cheap credit, literally.

Just look at the drugs trade. Every tom dick and harry is using coke now. These are the same guys that have loans out to finance their lifestyles.

Sonnenblumen

Ignoring the spurious comments, my expectations that the boom will continue. I'm in business which links to building and we are swamped, eg our lead times (and this is no brag) for project quotations is longer than some others order list. That said I know plenty good professionals equally/more busy than us.

On a separate point, companies laying off/short weeks for sparks are doing something fundamentally wrong. I know no sparks who isn't busy.

A lot comes back to professionalism, and as I've seen in other threads there's a lot left to be desired amongst Irish trades/professions. But good ones will always outperform, and grow market share. Weaker operators will be more vunerable in dynamic markets.

junkyard

Sonnenblumen wrote:

Ignoring the spurious comments, my expectations that the boom will continue. I'm in business which links to building and we are swamped, eg our lead times (and this is no brag) for project quotations is longer than some others order list. That said I know plenty good professionals equally/more busy than us.

On a separate point, companies laying off/short weeks for sparks are doing something fundamentally wrong. I know no sparks who isn't busy.

A lot comes back to professionalism, and as I've seen in other threads there's a lot left to be desired amongst Irish trades/professions. But good ones will always outperform, and grow market share. Weaker operators will be more vunerable in dynamic markets.

I don't think we're all wrong in our area anyway, we're all experiencing the same problem, big and small businesses alike. The local builders are busy enough but the rest of us have experienced a major slow down.

shoegirl

junkyard wrote:

I heard on the radio a few days ago that 89% of the population is relying on the construction industry, directly or indirectly, its a scary thought if this is actually the case. Has anyone any thoughts on the matter?:(

I would say that statistic is extremely unlikely to be accurate. I#d say the actual figure is around 20%. The problem I see is that a lot of people are in relatively low skilled jobs and have few other skills - and are probably part of the 27% of the adult population who are functionally illiterate. Which means that if these kinds of jobs start to disappear there will be nowhere for these guys to go.

The other problem is that huge rises in costs such as rent, utilities, insurance, will make it very hard to compete in an increasingly competitive market. For example take the example of the Roches Stores closure in Cork. Apparently the landlord tried to raise the rent by 100% which is pretty unscrupulous to say the least. As a result he ends up with no anchor tenant so instead of just having a change of tenant he ends up with no tenant at all so he totally looses the income. He's priced himself out of the market here. But it gets worse, because apparently other tenants at the same shopping centre are now losing business as they have lost one of the main draws to the centre. So he ends up losing their business too, if smaller traders start to close. The danger here is that his gamble on attempting a 100% increase in income have actually not only caused him to lose the income through not having the large tenant to replace the original store, he ends up losing the income from smaller tenants also.

This is the kind of greed that is likely to close down some of Ireland, inc.

BigEejit

shoegirl wrote:

I would say that statistic is extremely unlikely to be accurate. I#d say the actual figure is around 20%. The problem I see is that a lot of people are in relatively low skilled jobs and have few other skills - and are probably part of the 27% of the adult population who are functionally illiterate. Which means that if these kinds of jobs start to disappear there will be nowhere for these guys to go.

The other problem is that huge rises in costs such as rent, utilities, insurance, will make it very hard to compete in an increasingly competitive market. For example take the example of the Roches Stores closure in Cork. Apparently the landlord tried to raise the rent by 100% which is pretty unscrupulous to say the least. As a result he ends up with no anchor tenant so instead of just having a change of tenant he ends up with no tenant at all so he totally looses the income. He's priced himself out of the market here. But it gets worse, because apparently other tenants at the same shopping centre are now losing business as they have lost one of the main draws to the centre. So he ends up losing their business too, if smaller traders start to close. The danger here is that his gamble on attempting a 100% increase in income have actually not only caused him to lose the income through not having the large tenant to replace the original store, he ends up losing the income from smaller tenants also.

This is the kind of greed that is likely to close down some of Ireland, inc.

89% seems extremely high alright, although there is the possibility that the cash generated by the building industry has filtered out a lot more than the 20% you guess ... I would guess (and thats all we can all do isnt it) up to 30%..

Your other point about the greediness in Ireland is spot on, some people would stab their grandmothers for some easy money in todays Ireland ... sometimes it feels like everyone is trying to screw/extract the maximum amount of money they can for every little thing ... there is rarely a fair price anymore

(/me puts on asbestos undies)

junkyard

Tbh I'd say there are other plans for Wilton shopping centre like redevelopment and thats why the place is being run down so smaller shops will leave too and they can start with a clean slate rather than pay off existing tenants.

lomb

i reakon the loss of confidence will hit first in rural ireland, then in non dublin cities etc, and then possibly in dublin.
there is definately a bubble in certain irish property, and when supply tips demand, kabboom!
on the other hand some reackon as long as ireland is prosperous people will come adn soak up the supply.
but its all based on confidence and on willingness to take on credit. when this evaporates then discretionary spending/high bids on property will taper off.
undoubtadly cars are where one sees it worst in some respects as no one needs a new car, when a 2 grand car does the same 'thing'. confidence is what buys new and expensive cars.

D'Peoples Voice

lomb wrote:

undoubtadly cars are where one sees it worst in some respects as no one needs a new car, when a 2 grand car does the same 'thing'. confidence is what buys new and expensive cars.

IMHO Pubs will take an unmerciful hammering this christmas.
Both from the clampdown on drink driving and the fact that people have far less surplus cash to spend on beer!
Wine sales will soar!!!!

DublinDilbert

I would say the amount of people working in the construction industry is closer to 30%... There's even a huge amount of work in finishing off / kitting out apartments & houses, ie for the 90K units completed this year, that's 90K floors that need tiling, 90K washing machines that need to be bought ect...

90K washing machines, is alot of washing machines!! Add on 90K sofa's, 90K TVs ect... furnishing these units is an industry in itself! And with banks giving 110% mortgages, there's plenty of money out there for kitting these units out...

SimpleSam06

junkyard wrote:

Is anyone else experiencing a similar downturn country wide or is it just around my area.

That depends on where your area is, one of the websites in your sig is made by a company in Russia, according to the alphabet. I'm sure the other one is too, drivinginfo.ie. You'd be much better off sticking to a site made in Ireland, like www.LIreland.com, for example. You may be experiencing a slowdown for that very reason. Are you part of the problem?

The official figures for construction in industry put that and its dependents in and around the 25% mark. That is not insignificant; note that in the height of the American great depression, the economy had dropped by 29% at its worst. I think on the whole we have a rough time ahead, and its people with savings that will come out ahead. I feel sorry for anyone who has bought property in the last five years.

Not to worry folks, we still have tourism!

BigEejit

SimpleSam06 wrote:

Not to worry folks, we still have tourism!

hehe, lots of people will be having their holidays at home ... thats good for tourism isnt it

junkyard

SimpleSam06 wrote:

That depends on where your area is, one of the websites in your sig is made by a company in Russia, according to the alphabet. I'm sure the other one is too, drivinginfo.ie. You'd be much better off sticking to a site made in Ireland, like www.LIreland.com, for example. You may be experiencing a slowdown for that very reason. Are you part of the problem?

The official figures for construction in industry put that and its dependents in and around the 25% mark. That is not insignificant; note that in the height of the American great depression, the economy had dropped by 29% at its worst. I think on the whole we have a rough time ahead, and its people with savings that will come out ahead. I feel sorry for anyone who has bought property in the last five years.

Not to worry folks, we still have tourism!

Well to be fair, I support them because they support me and they're both Irish related companies. Its not just me experiencing problems, suppliers and other businesses are suffering a similar slow down.

Do-more

As I see it confidence is definitely on the down-swing. With gas and electricity prices taking huge leaps, peoples' disposable incomes are being eroded, add in interest rate increases on mortgages and car loans and it bites even further. These increases may not affect everyone but they do affect a sizeable number. Only last week I overheard a seemingly well-heeled looking woman in Lidl saying she couldn't afford to shop at Tescos any more! She certainly won't be buying too much in local shops so...

As for the housing market I think it's a real "house of cards" according to the statistics 40% of new houses were bought by investors last year. Around my way a €320,000 apartment can be rented for €650 a month but the repayments would be €1650 a month over 30 years if you were to buy it. So an investor could only be buying it in the hope of capital appreciation, if house prices stop rising (looks like they may have already) then investors will most probably stop buying. Then we have a situation where at least 5 - 10% of the workforce are facing unemployment directly as the developers will pull back on building. The knock-on effects could be grave. As was pointed out before, furniture and electrical shops will be affected laying of staff too and general economic confidence will be hit hard as many worry about their own job security. The list of people affected is almost endless from people behind deli counters, because the builders aren't coming in for their breakfast rolls to newspaper staff because of lost property advertising revenue etc.

It will be interesting to see what comes out of the budget in regard to stamp duty as a reduction could be enough to fuel the growth for another 6-12 months, unfortunately the higher we climb the further we have to fall!

BigEejit

Do-more wrote:

.............unfortunately the higher we climb the further we have to fall!

nuff said

Sonnenblumen

BigEejit wrote:

nuff said

You remind me of the guys who believe the world is flat!

BigEejit

Sonnenblumen wrote:

You remind me of the guys who believe the world is flat!

looks flat from where I'm standing

Do-more

Sonnenblumen wrote:

You remind me of the guys who believe the world is flat!

All I can say my old sunflower is, if you think a 4" solid costs €1, you don't have a very good view on things!;)

chump

I'd be of the opinion we're heading into a bit of a dip alright. Mainly precipitated by rising interest rates, ridiculous debt levels and over-reliance on construction.
I can see interest rates continue to rise into 2007, and who knows when they'll stop.
Our ridiculous debt levels aren't going to be dented without vast wage increases - and if that happens we're screwed on competitivity grounds
Our over-reliance on construction will naturally decline somewhat due to falling demand in homebuilding, but increases in public spending on infrastructure will soften any fall here.

We're had it good for all my memorable adult life (24), I can't imagine what hard times must be like, anecdotes aside. I strongly believe there are a large porportion of my generation who don't believe we'll ever see 'tough' times again.

Hopefully we wont!

Colonel Sanders

Surely the effects of 'rip off ireland' will have to bite at some stage as we price ourselves out of most industries that do not suffer from industrial inertia. Rising energy costs put pressure on most industries but manufacturers in particular. Look at the closure of the Cadburys factory last week.

Take a worst case scenario: A rise in unemployment (=> increased social welfare cost) matched with irresponsible public sector wages and pension benefits. The result is either/or a rise in taxes or reduced infrastructural spending which will erode our competitiveness further. Add in rsing interest rates and we could be in trouble. It will be interesting to see how it pans out and how people financing over lavish lifestyles on cheap credit cope.

D'Peoples Voice

Colonel Sanders wrote:

It will be interesting to see how it pans out and how people financing over lavish lifestyles on cheap credit cope.

Here's a thought,
in 2002, we were led to believe by the opposition parties that the country was falling into economic decline. So at the 2002 elections, FF got elected because people had more confidence in them during a recession than FG/Lab after their failed policies of the 1983-86 period.
Now approaching 2007, we are again approaching difficult times, who do you think people will vote in to get us through the difficult times.

Pa ElGrande

D'Peoples Voice wrote:

Here's a thought,
in 2002, we were led to believe by the opposition parties that the country was falling into economic decline. So at the 2002 elections, FF got elected because people had more confidence in them during a recession than FG/Lab after their failed policies of the 1983-86 period.
Now approaching 2007, we are again approaching difficult times, who do you think people will vote in to get us through the difficult times.

If the major opposition parties (what opposition?) performance over the past term is anything to go by then it appears the more rope the current incumbents give them the more they tangle themselves in it. The only danger to the current government come the elections is low turnout. Times are good, better than they've ever been, without an economic shock there will be no major change.

Sonnenblumen

Do-more wrote:

All I can say my old sunflower is, if you think a 4" solid costs €1, you don't have a very good view on things!;)

OK Moron why not ring the KCR Builders Providers (tel 01-490 8283/ 490 8765) and report prices back to class!

You can quote incl/excl VAT.

After that, change the sheets!!

shoegirl

Do-more wrote:

As for the housing market I think it's a real "house of cards" according to the statistics 40% of new houses were bought by investors last year. Around my way a €320,000 apartment can be rented for €650 a month but the repayments would be €1650 a month over 30 years if you were to buy it. So an investor could only be buying it in the hope of capital appreciation, if house prices stop rising (looks like they may have already) then investors will most probably stop buying.

Ironically I think what has artificially propped up the building industry is twofold:
a) net immigration - lots of Eastern European builders coming over need somewhere to live - so they can build lots more building for other eastern European builders to live in!!
b) the non-building of social housing - note that fingal co co are advertising "affordable" housese for sale to "poor" couples earning up to 150k (which is very definitely high level executive/professional income rates) - meanwhile there are huge waiting lists for social housing - who end up - inevitably - falling back on the private rented sector - which again keeps this sector artificially afloat.

The irony is that the hostility against eastern europeans which has contributed to demands to keep the latest round of EU entrants out of the job market is based on the assumption that immigrants are taking out more than they give - when in fact what does seem to be happening is sub-economies developing to meet their needs - anybody else apart from me noting the growing "boom" in ethnic foodstores and the importation of commodities from Eastern Europe and Asia? There's obviously a huge market for this.

They ain't stupid either. While its true that a lot of migrants are ripped off when they arrive here first, new EU citizens are pretty quick to clue on to this and walk away from rip-off employers pretty damn quick. They didn't come here to work on the cheap - they came here to get the same as you or I would want. And why not?

I do think, however, that we have two other huge problems in Ireland:
a) an almost total dependence on imported oil and gas for energy.
When the Seven Heads field was being developed (being designed and built for the oilfield conglomerate I worked for at the time) I remember seeing company propoganda that told us that if Seven Heads would provide as much as 90% of Ireland's gas needs within a few years, and without it, Ireland would end up importing about 90% of her gas needs.
Well guess what happened - Seven Heads turned out to be a disaster and so Ireland is now important 90% of its gas.
Ironically, potentially good sources such as wind farms and the Corrib development are being fought tooth and tail by those impacted by their development - though of course these may themselves - if they ever are built - may also turn out to be the kind of also-ran that Seven Heads turned out to be.
The problem is though - where we will find energy sources if costs keep soaring?
b) heavy dependency on economies such as the US and UK, which are both potentially (esp the US) teetering towards depressions, and in the case of the US receiving majorly negative political feelings against companies which are "unpatiotic" insofar as investing in low-tax countries like Ireland as opposed to back home.

I am noticing particularly negative figures coming from the US right now, with falls in the housing market and weak trade figures. If the dollar continues to fall it make Ireland a less attractive place to invest US funds. That isn't a good thing.

junkyard

Some good points there shoegirl, wind power should be encouraged all the way. As well as being a clean source of energy there are plenty of locations too. Solar energy is never going to happen at decent level in this country. There's no doubt the economy is very shaky contrary to popular belief, certainly its shaken a lot of people in my area of late and doesn't seem to be getting any better.

mckers

A few points, there are officially 300,000 working in the construction industry, don't know what percentage that works out to be. Construction is by far the largest individual employment sector over the last number of years and has been generating supernormal profits for those investing in it.

Somebody mentioned that 40% of new properties built last year were bought by investors, pretty ridiculous really. These investors have huge financial backing behind them, they get virtually 100% interest only loans and are certainly looking towards the capital appreciation route rather than income generation.

On the budget, McDowell did mention that he would like to get rid of stamp duty, which accounts for somewhere between 1 and 2 bn per annum (I think). If we look at this from a pragmatic point of view, the intention of the removal of stamp duty would be to help low income earners to get on the property ladder. As stamp duty is a progressive tax (higher rates of tax on higher property prices), its removal may not have as big an impact on the lower level income earners as one would first think.

There is one change which I would like to see in Budget 2007 - the removal of an interest deduction from rental income. Reasoning - a person paying mortgage interest on the primary residence gets tax relief of approx 600 (if single) and twice that if married. Investors can sometimes be getting 6-10k in relief it they were to buy the same property. This puts owner occupiers at a disadvantage.

Wind power - we might just be getting a little idealistic here. Can anyone tell me how many wind turbines we would need to generate the same level of electricity as a small nuclear power plant? I do agree with wind energy as well as solar power, but it should not be the primary source of energy.

Back to the Irish economy, there are certainly signs of change, 1) pubs are quieter, and many of them are being sold to property developers, 2) large numbers of houses are being withdrawn from auction (many times at higher than the AMV 3) not as much of the SSIAs has been invested in the economy. To be fair, if you want to buy a property, 10-20k from an SSIA won't go too far (especially in Dublin). 4) as far as I know banks are pulling back on 100% mortgages 5) a further .25% interest rate rise is on the cards

There also seems to be a feeling amongst Irish people that we have a god given right to the economic lifestyle we currently have. Having worked with eastern europeans, I have found that a lot of them are far more productive in their work than their Irish counterparts. On top of that, we are constantly given the impression that we are a low tax economy. Maybe that is the case for companies paying tax at 12.5%, but it is certainly not the case for individual, who pay income tax on their salary, and then pay all the indirect/stealth taxes on their after tax salary (i.e. stamp duty, vat, vrt etc). Based on this, it is quite clear that we are in fact a high tax economy and we should be comparing the services provided by our government with the services provided by our Nordic counterparts and even the newly arrived 10 accession countries - no comparison. The quality of life that can be achieved in those countries is far higher.

junkyard

There's no doubt about it but quality of life here in Ireland is gone out the window, its nothing but a rat race now for sure.:(

Do-more

There is no question that with a dynamic economy there are a huge number of potential influences.

There is also no question that Ireland has benefited from the influx from the new EU states, however therein lies another threat to the economy, the majority of these workers are living in rented accomodation and so are highly mobile.

If the investors lose confidence in the housing market and the housing starts take a cosequential downturn, a disproportionate number of those facing unemployment will be immigrants. Many will move on to other countries or return home. This will leave even more investors with unrented properties so they will be getting a double whammy!

As for the energy side of things, there is no question that this Government has really only paid lip-service to the need for more renewable energy sources, what money it has spent (such as the SEI Greener Homes scheme) has been wasted IMO because the focus is all wrong.

Gurgle

junkyard wrote:

There's no doubt about it but quality of life here in Ireland is gone out the window

What are you comparing it to?
Look aroung you - new cars, SKY TV in every council flat, PCs, pubs & clubs, designer clothes, gyms, swimming pools, health spas, beauticians, golf courses, travel agents.

Every possible sign of a society in the lap of luxory.

The country has never had it so good.

D'Peoples Voice

mckers wrote:

On top of that, we are constantly given the impression that we are a low tax economy.

We are, but you must remember how they calculate that, it's EVERY bit of tax collected added up and then divided by the size of our GDP.
Given Ireland's has a relatively high GDP for it's miniscule population etc, our tax take also seems small in comparison. It's not that our tax is low, it's that our GDP is relatively high.
If you look back over the years you will see that tax take has rarely fallen from one year to the next, but our GDP has been growing at up 6%p.a., so as a proportion the tax take is falling. Whether or not individuals experience that is another story!

junkyard

Gurgle wrote:

What are you comparing it to?
Look aroung you - new cars, SKY TV in every council flat, PCs, pubs & clubs, designer clothes, gyms, swimming pools, health spas, beauticians, golf courses, travel agents.

Every possible sign of a society in the lap of luxory.

The country has never had it so good.

There's more to life than luxary items, what I mean by quality of life is that people have no time anymore, its all work, work, work. All people want now is money and they don't care who they stand on to get it.:(

Sonnenblumen

junkyard wrote:

There's no doubt about it but quality of life here in Ireland is gone out the window, its nothing but a rat race now for sure.:(

Got to admit it despite the many fat cats, there are plenty of beautiful rats around these nowadays!

junkyard

Sonnenblumen wrote:

Got to admit it despite the many fat cats, there are plenty of beautiful rats around these nowadays!

Too True.:(

Reyman

chump wrote:

We're had it good for all my memorable adult life (24), I can't imagine what hard times must be like, anecdotes aside. I strongly believe there are a large porportion of my generation who don't believe we'll ever see 'tough' times again.

Hopefully we wont!

Sonny , if the 1980s hits again you'll shake with fear

Mark my words!

Pa ElGrande

chump wrote:

We're had it good for all my memorable adult life (24), I can't imagine what hard times must be like, anecdotes aside. I strongly believe there are a large porportion of my generation who don't believe we'll ever see 'tough' times again.

Hopefully we wont!

The 1980's started off with an oil price hike, followed by a credit crunch (Bank Managers make your life hell when this happens) , high interest rates, high inflation, high unemployment, high emmigration, high taxation, and even then the government could not generate enough revenue, a huge black economy, Adverts in the Evening Herald by handymen "no job too small". Getting a job in this country required pull and the right address i.e. if your address had Ballymun on it, your C.V. went in the bin. At one stage we had the best qualified bar workers in the world, the county council had a waiting list of people who wanted to become bin men. Getting a secure paid job required 5 years experience and a degree, I had neither. The American embassy had long queues of Irish people looking for that elusive work permit/visa, not to mention all the illegal Irish working in America. Bad times come no more.

There is an interview with David McWilliams on the Gerry Ryan show this morning plugging his new show next Monday evening, it's about 30 minutes long, 1 hour into the show.

http://www.rte.ie/rams/radio/latest/Fri/rte-2fm-grs-gerryryanshow.smil [you need realplayer]

Do-more

Spoke to two different business people over the weekend and both had the same story.

The first is in the Jewellery trade and things are normally starting to fly at this time in the run up to Christmas, but this year it's just dead.

The other is in the car trade and the phone just ain't ringin'

Just two cases but something tells me they are not alone...

BigEejit

The 80's .... *shiver* ... after leaving cert in my area, 90% of those that didnt go to college/Fas (Anco) emigrated ... there simply was no work ... my first full time job payed £75 a week (wasnt a lot then either) I only took it for the experience, didnt matter what qualification you had, no experience = no job most of the time.... if there is a massive downturn in the economy, the eastern europeans with either go off looking for work in another country or stay here for the better dole

Afuera

BigEejit wrote:

if there is a massive downturn in the economy, the eastern europeans with either go off looking for work in another country or stay here for the better dole

They won't even need to stay here to obtain the Irish dole...
If they've been signed on for one month under the Irish system, they can then move to any other EU country and receive it there for a 3 month period. I can't imagine many Eastern Europeans hanging around in Ireland without work when they can move back home (or closer to home i.e. Germany) where everything is cheaper, and still get the Irish dole.

BobbyD10

I would like to say that this is an excellent thread with many differing opinions which make it fascinating reading.

So do please continue with your comments and opinions as the economy is changing everyday and factors which effect this are constantly altering which leads to an uncertain months ahead.

Abit more light will be shed on things when the Budget is announced and people will have an idea on how confident the government feels about the economy, and this in turn will change attitudes, with many people thinking of buying a home waiting to see what effect the budget will have on the size of mortgage they may require(hopefully less).

Who knows really what will happen, but from current reports the economy will remain strong and with the estimates predicting a big increase in public spending(dont know if thats good or bad!!!) there is still an air of confidence.

D'Peoples Voice

BobbyD10 wrote:

Who knows really what will happen, but from current reports the economy will remain strong and with the estimates predicting a big increase in public spending(dont know if thats good or bad!!!) there is still an air of confidence.

I must admit that I have never known for so many banks to be offering such great deposit/savings rates. I believe that this will have a major draw on the money maturing from the SSIAs. A lot of peopel I know are saying that ..well I was contributing EUR 254 to the SSIA and I didn't notice it gone, so I might as well start saving EUR 250 with AIB/Bank of Scotland Ireland regular savings account. Therefore what the SSIA has done is turn a lot of people into savers.
In addition people are more anxious not to WASTE their SSIA, so consumption is being held back as part of a wait and see policy. This is backed up by the low rates of inflaiton in ireland (low relative to the rest of the euro area given our employment & economic growth rates).
Hence, I expect Ireland to slow down next year, not grow at a quicker rate! This will mean that we won't get that massive splurge of spending that all retailers are hoping for. In fact, I suspect that a lot ot people will try to reduce their outstanding mortgage. If in the budget, the Governemnt were to offer EVERYONE tax relief on pension contributions of 42%, regardless of whether they were top rate payers or not, then I could see a massive investment of money into pensions!
Either way, you know there is a slow down in the economy if you can walk into a car garage and buy a car, without having to join a waiting list!

Do-more

Just wondering what peoples feelings are on the economy now?

Lots of doom in the media about house prices, altough the vested interests continue to put a brave face on it!

Many reports also that people are not spending their SSIAs (mines going to be paying off the last of a loan).

On the other hand I've got a mate with a high ticket luxury goods business (not cars;) ) and business is booming!

Is the gravy train heading at full steam towards the buffers? Or is it just losing a bit of steam as we go up hill for a bit?

betonit

interest rate hikes have affected demand for goods overall eventhough inflation is still rising (energy, loan repayments). people are saving their ssia's. Dont under estimate the negative affect of a continually weakening dollar. These are contributing to a slowdown. There's alot of uncertainty out there...
The cost of doing business in this country needs to be the primary election issue. If more and more businesses move and are thinking of moving (some of the biggest are considering) then we will be back in 1986. Health, education, transport etc, all very important election issues but if unemployment rises there is no way to pay for these. More to pay in socail welfare less comming in income tax and vat returns. There is a slow down because people dont know whats goin to happen with interest rates, inflation, big multi-nationals. The govt need throw something out there to people at ease.

is_that_so

Not sure where some of these sentiments are coming from, although some perspectives here have been more than a tad influenced by the house price debate. Housing stock does not equal the economy, the economy will go on whether house prices change or not.

Economic growth this year will be between 4% and 5% depending on who you read. This is generally considered acceptable, next year it may go down to 2%-3%, which is a little on the low side. The big danger to all of this is inflation and probably borrowing , although the ECB is helping out on interest rates.

Otherwise we are not in bad shape; 4% or so unemployment, still running a trade surplus, and vacancies in many areas of the economy, construction aside.

I know nothing about construction however if the prevailing attitude amongst some tradespeople is being too busy to bother showing up or quoting obscene prices , well any problems they run into will be of their own making. It is not good business sense to ignore potential business, however small.