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"Boom will end in 2008, broker warns"



JCSkinner

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Sunday Business Post said:
This means that the government finances will remain flush with money moving into next year, but that the government in power following the general election - expected next May - will face a much tighter position in 2008, as the boom finally starts to fade.
This is the interesting bit. I expect the current government to slink off into opposition for a term, safe in the knowledge that they can erroneously blame FG and Labour for the inevitable downturn, and then position themselves as the Government of Boom for the election following.
 

emmet100

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Well personaly I think the construction boom will continue for another decade at least as we catch up with Europe in terms of our roads, schools and hospitals. Also, a tightening of the belts in 2008 might be a blessing in disguise and end the current view by government and the man on the street that the good times will never end. I think if cut backs have to be made in, for example, healthcare, this could lead to getting rid of wasteful practices and the current situation where four adminstrators to the job that one did ten years ago.
 

farnaby

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Makes sense - a foreseeable decline in consumer spending and construction. (3% growth per year is no disaster though.)

These economic forecasts always look at us coming to the end of a cycle waiting for the bad times rather than looking beyond the slowdown. I would love to see something positive in the pipeline for the Irish economy - home-grown successes, major new competencies developed here etc. to bring us to a new stage of development, away from the EU subsidy/US FDI causes of the good years. I can't at the moment (unless the billions put into R&D bear fruit and we actually capitalise on these) - anyone see any possibilities?
 

emmet100

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farnaby said:
anyone see any possibilities?
As I've said before on this site, massive port facilities will have to be built in the Shannon Estuary by 2040 to cater for supermax tankers that will be unable to reach the maninland European ports. This would be a major employer and source of revenue for government, but its a good 30-40 years away.
Until then, we're a country surviving by selling houses to each other.
 

farnaby

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JCSkinner said:
Not really. We had it briefly, and we blew it on Bulgarian holiday homes. Game over really.
The brief spark of happiness, the inevitability of failure, the absurdity (of Bulgarian holiday homes), the sparse meaningful language - have you been at the Beckett again?! There is no 'game over' in economics! There will be a slump, maybe it's inevitable, maybe it's too late to avoid even if we could, but it's not the end of the world, we can succeed again, and we don't have to wait for godot.

emmet100's got the idea, hope that gets consideration by government.
 

Skin

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I'm predicting Sept '06 - Jan '07 as the first signals of the end of the boom.

1. Interest rate increases
2. 90,000 houses set to be built this year overreaching demand. (Immigrant population is largely mobile, rents have begun to decrease in parts of Dublin)
3. (a)SSIA's - too much read into them. Avr payout is according to BoI id €13800 which implies that despite all our wealth the avr person couldnt afford to save the max.
(b) also (mainly from my own experience) half of my SSIA is already tied up in a car loan. I'm guessing many others will find themselves i the same position.

I dont think it will be a crash but certainly a sharp correction in houses prices + increased unemployment starting somewhere from Sept '06 - Jan '01.
 

emmet100

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JCSkinner said:
I give it ten years max before we're a net emigrating country again. Basically within six months of US IT multinationals pulling out to go elsewhere, we'll be utterly banjaxed.
I don't think Ireland will go back to the Eighties unless there is a massive economic disaster (e.g. collapse of the dollar). Companies will always need highly-educated English-speaking people and that is our speciality. Who knows, maybe Chinese and Indian firms will be employing Irish people in their thousands come 2030. Compared to the rest of Europe, we're simply the best in terms of tax, worker education, and we're catching up on infrastructure.
Encouraging major Irish employers to grow through massive once-off grants (I'm talking hundreds of millions per company) could be a way of creating Nokia-style success stories for our companies. Pahramcueticals and chemicals seem to be the way forward though, but construction and consumer demand will see us through the next ten years or so.
 

zakalwe

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funny,

all the economists (formerly known as "the dismal scientists") see that growth may decrease a little and stabilise but most of the commentators predict and gleefully wait in anticipation for a profound collapse in the economy.

for my 2 cents, i think the economy will wobble on at approx the same speed for the foreseeable future. a crash will follow a global catastrophe not a domestic one. cranks have predicted the end of the world/mankind/economy for years now and have been proved wrong.

i myself, for my masters, wrote a dissertation on the eventual slump in the economy. i predicted 1996. just as well i didn't put money on it! the only consistant thing about this economy is its ability to confound economists and the industry!
 

Sidewinder

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zakalwe said:
funny,

all the economists (formerly known as "the dismal scientists") see that growth may decrease a little and stabilise but most of the commentators predict and gleefully wait in anticipation for a profound collapse in the economy.

for my 2 cents, i think the economy will wobble on at approx the same speed for the foreseeable future. a crash will follow a global catastrophe not a domestic one.
That's quite true, as long as the rest of the world is in reasonable shape (and as we've seen, "reasonable" for us means anything from slightly poorly to booming, we seem to happily handle both), but some people are saying the US is rapidly approaching meltdown, and expect the dollar to collapse, the US housing market to go pop, and a period of raging stagflation to take hold there. Predictions are all for Q4 06/ Q1 07 for this collapse to become apparent. So we've got 6 months to clear any unecessary debts just in case...
 

Ponzi

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As manufacturing employment falls we will become a 'knowledge based economy'. The Chinese, Indians and East Europeans will use Irish expertise to aaah.... to do.... aaah things they cant do because they don't have the mental capacity for complicated stuff. And we can speak English so we do. Oh yeah we will still get paid twenty times the wage for doing the same work as the Chinese because we are lovely and capitalists like the craic here. :roll:
 

JCSkinner

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Sidewinder said:
zakalwe said:
funny,

all the economists (formerly known as "the dismal scientists") see that growth may decrease a little and stabilise but most of the commentators predict and gleefully wait in anticipation for a profound collapse in the economy.

for my 2 cents, i think the economy will wobble on at approx the same speed for the foreseeable future. a crash will follow a global catastrophe not a domestic one.
That's quite true, as long as the rest of the world is in reasonable shape (and as we've seen, "reasonable" for us means anything from slightly poorly to booming, we seem to happily handle both), but some people are saying the US is rapidly approaching meltdown, and expect the dollar to collapse, the US housing market to go pop, and a period of raging stagflation to take hold there. Predictions are all for Q4 06/ Q1 07 for this collapse to become apparent. So we've got 6 months to clear any unecessary debts just in case...
Add rising interest rates to Ireland's levels of personal debt, mix in a housing market correction, then add a dollar slide and resulting US economy wobble and watch as our over-exposed asses slide straight into a downward spiral we have no control over.
 

emmet100

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Ponzi said:
As manufacturing employment falls we will become a 'knowledge based economy'. The Chinese, Indians and East Europeans will use Irish expertise to aaah.... to do.... aaah things they cant do because they don't have the mental capacity for complicated stuff. And we can speak English so we do. Oh yeah we will still get paid twenty times the wage for doing the same work as the Chinese because we are lovely and capitalists like the craic here. :roll:
You seem to be forgeting that all MLCs need regional HQs, and Ireland is the ideal location for such HQs for the European market.
 

Ponzi

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I think you'll find that Ireland has fallen down the competitiveness tables over the past five years, foreign direct investment has slowed to a trickle. Worth noting that incomes growth in America has remained static for five years now.
 

Sidewinder

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JCSkinner said:
Add rising interest rates to Ireland's levels of personal debt, mix in a housing market correction, then add a dollar slide and resulting US economy wobble and watch as our over-exposed asses slide straight into a downward spiral we have no control over.
Well, I rent and I plan on having every single last cent of personal debt paid off by October, so I'm not too worried 8)

I know a lot of people are insanely over-exposed though if things even go slightly pear-shaped...
 

factual

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emmet100 said:
Well personaly I think the construction boom will continue for another decade at least as we catch up with Europe in terms of our roads, schools and hospitals. Also, a tightening of the belts in 2008 might be a blessing in disguise and end the current view by government and the man on the street that the good times will never end. I think if cut backs have to be made in, for example, healthcare, this could lead to getting rid of wasteful practices and the current situation where four adminstrators to the job that one did ten years ago.
I hope there would not be cutbacks in healthcare. Of course make it more effective as an organisation but we need to build up healthcare going foward.
 

factual

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Ponzi said:
I think you'll find that Ireland has fallen down the competitiveness tables over the past five years, foreign direct investment has slowed to a trickle. Worth noting that incomes growth in America has remained static for five years now.
The worry about this in a fixed exchange rate regime is that Ireland cannot devalue to become more competitive again.
 


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