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Economists forecast 15 more years of strong growth


eurocrat

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Article for Todays Irish Times:

Economists forecast 15 more years of strong growth
Marc Coleman, Economics Editor

The Republic's economy will continue to grow strongly over the coming 15 years as the population reaches 5.3 million by 2020, research published yesterday has found.

In its latest forecast on demographic trends and the economy, entitled 2020 Vision, Ireland's Demographic Dividend, economists from NCB stockbrokers forecast that population and productivity growth will underpin economic growth of 5 per cent over the next 14 years, supporting strong demand across a range of spending categories.
More here:

The article goes on to say that by 2020 Ireland will have a population of 5.3, 20% of which will be migrants.

Some very big challanges lie ahead for Ireland, but our potential is huge. This economic boom is no flash in the pan. We are no course to become Switzerland, if we play our cards right.

PS: I hope nobody PMs me asking me for a log-in for ireland.com. I don't have one, so I don't. Honest...
 

PinkoLeftie

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Can anyone explain to me why they expect "The economy will sustain productivity growth - growth in the potential output per worker - of close to 3 per cent. " per annum?
 

eurocrat

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PinkoLeftie said:
Can anyone explain to me why they expect "The economy will sustain productivity growth - growth in the potential output per worker - of close to 3 per cent. " per annum?
I guess that would be in their full report. Which I am struggling to find online. I can't even find their homepage.
 
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Access the actual report here:

Irish Economy: Two reports offer contrasts in caution and cheer

I don't have time to go into the NCB Stockbroker's report in detail. The economists assume that population growth is a guarantor of nirvana or a nightmare, ignoring many threats that may significantly impact economic growth.
 

Biffo

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I haven't read it but I read somewhere that it is based on the assumption that all other things remain equal which is unlikely over such a long period of time.
 

PinkoLeftie

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Biffo said:
I haven't read it but I read somewhere that it is based on the assumption that all other things remain equal which is unlikely over such a long period of time.
I heard George Lee saying that on Morning Ireland today.
 

PinkoLeftie

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NCB say that they don't believe multinationals to be important to the economy.

Mr O'Brien rejected suggestions that the economy was losing out as a manufacturing base.

Multinationals account for 80% of output and their impact on the economy "has been overestimated", he said.
Is that not a strange position to take, since multinational manufacturing firms account for a lot of our exports?
 
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PinkoLeftie said:
Can anyone explain to me why they expect "The economy will sustain productivity growth - growth in the potential output per worker - of close to 3 per cent. " per annum?
Productivity is a measure of output divided by hours worked in the economy. The output figure is taken from the gross domestic product data.

George Lee did make the point that as the percentage of the workforce doing unskilled jobs grows, as high technology mfg jobs fall, output and productivity is likely to fall.

"It ain’t what you do, it’s the way that you do I.T." - Why US multinationals win the productivity race
 

PinkoLeftie

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MichaelHennigan said:
George Lee did make the point that as the percentage of the workforce doing unskilled jobs grows, as high technology mfg jobs fall, output and productivity is likely to fall.
So he did, thanks for that.
 
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PinkoLeftie said:
NCB say that they don't believe multinationals to be important to the economy.

Mr O'Brien rejected suggestions that the economy was losing out as a manufacturing base.

Multinationals account for 80% of output and their impact on the economy "has been overestimated", he said.
Is that not a strange position to take, since multinational manufacturing firms account for a lot of our exports?
He was talking through his hat. The notion that a 5 million person open economy could be self-sustaining like the US is bs.

Wait for the day that Dell and Intel say they are closing shop!

O'Brien said that the foreign firms are not big purchases of local goods/services. That again is bs.

Ireland's industrial base relies on 149,654 jobs in 1,273 foreign-owned companies and on 147,895 jobs in 7,390 Irish firms. The service sector, with 240,000 businesses registered for VAT, employs about two-thirds of workers and accounts for 70% of GDP.

Some 50% of workers in the private sector don't even have pensions and you can bet that they are not employed by foreign firms who generally top the scale for benefits etc


Industrial employment has fallen by about 30,000 since 2000.

90% of industrial exports are made by foreign owned firms

Most of the products we manufacture are designed elsewhere

The bulk of our exports are marketed/sold by organisations based outside Ireland

Ireland's industrial base relies on 149,654 jobs in 1,273 foreign-owned companies and on 147,895 jobs in 7,390 Irish firms. The service sector, with 240,000 businesses registered for VAT, employs about two-thirds of workers and accounts for 70% of GDP

The Pharmaceutical Sector is responsible for 40% of Irish exports; Ireland has attracted thirteen of the top fifteen pharmaceutical companies in the world and twenty five of the top fifty.

About two-thirds of Ireland's top 100 exporters are foreign affiliates, mostly American.

There are 165,000 companies operating in Ireland compared to 147,000 ten years ago. The major growth in our economy over recent years has been accompanied by a rise in corporate profits due to increasing export and import markets.

This has resulted in a big increase in our corporation tax receipts despite the reduction in the standard rate of corporation tax from 36 per cent in 1997 to 12.5 per cent in 2003.

The yield from corporation tax in 1997 was about €2,160 million and this has increased to about €5,330 million in 2004. About half is paid by multinationals on their overseas profits that are funneled through Ireland.
 
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IDA Ireland estimates that the expenditure in the economy by foreign firms is €16bn comprising €5bn in payroll costs.

The average annual pay in such firms is €40,000.

Apart from the technology transfer in the skills acquired, we will only appreciate the loss when it happens.
 

eurocrat

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Is there any evidence that our multi-nationals are going to pull out any time soon, if at all?

Seems unlikely given the amount of money they have invested themselves.

Since large companies tend to go whereever they can make profit, can we really expect an Irish owned firm to stay in Ireland any longer than a non-Irish company? Patriotism rarley enters a board room.

Plus, whats actually wrong in having a Serivices based economy over a manufacturing based one? Germany has a manufaturing based economy with massive export growth and yet are struggling. Also it can be argued that a Service based economy is kinder to the enviorment than an manufacturing one.
 

SPN

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Did the report specify what energy sources we would be using, and what the effect would be of transitioning over to these energy sources?
 

PinkoLeftie

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eurocrat said:
Is there any evidence that our multi-nationals are going to pull out any time soon, if at all?
While nobody expects Dell/Intel to pull out soon it is believed they will move to cheaper markets someday. But that's neither here nor there, in a way, the question is while they are here, should NCB be saying "they're not important" when clearly they employ a significent number of poeple (149,654 according to MichaelHennigan) and account for a fair amount of our exports.

eurocrat said:
Plus, whats actually wrong in having a Serivices based economy over a manufacturing based one?
I've no idea. There is no limit to what I don't know about economics. :oops:
But would the decline in exports not be a serious problem? Do we export services to same degree that we export goods?
 
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Last Oct a Dept of Agriculture sponsored report - Rural Development Report 2025- forecast that most foreign mfg firms will move to low-cost locations by 2025.

Th report also forecast that the number of fulltime farmers would fall from 40,000 to 10,000.

Mfg is still very important for German exports - Siemens - Germany's largest private sector employer?, VW, Bayer, Basf etc. SAP is Europe's biggest software co and the only one with a global brand.

Services are not easy to export unless a company has a global brand like Accenture.

Companies like Intel could move when they have to face a decision to re-equip when products are dropped.
 

FutureTaoiseach

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This is a frightening level of immigration.

I would argue that current immigration trends could actually harm the economy in the long run. Immigrants need to be housed and are fuelling a construction boom but this is storing up trouble in the short-medium term by racking up house prices beyond affordability, and in the long-run this will lead to a collapse in housing demand as the price just goes too high relative to what Irish people can afford - with the likely outcome being a property crash and a recession. The government's immigration policy is short-termist in the extreme. We need to avoid becoming even more dependent on construction than at present. Instead of trying to maximise economic growth in the short-term, the government should aim for a lower, more sustainable rate of growth, and consequently should take a more restrictive approach to immigration. There is also a danger that the temptation to bring in cheap immigrant labour will deter employers from retraining their existing Irish staff and encourage displacement and exploitation. Also, the one-dimensional way in which only the economic aspects of immigration are being considered by the politicians, distracts attention from vital questions of ghettoisation and erosion of national identity. Experiences in France and Holland would seem to disprove the Utopian fantasies of multiculturalism that Irish left and dogooders tell us we must believe.

So I am not as convinced by NCB that immigration is ultimately good for the economy on the present scale. But I have a feeling that NCB may actually be underestimated the current levels of immigration. The are assuming 70,000 per annum until 2010, after which it supposedly drops to 25,000. The reality is that this based on an assumption that 70,000 is the current level. But is it? The vast majority of non-EEA 'students' are not registering, and others are being told - as shown on Prime Time recently - that the 'college' will only renew their visas if they work for slave pay in some sweatshop. The non-EEA students are required to register. The media says it tends not to happen - with an estimated 85,000 Chinese here compared to 15,500 officially registered Chinese here. Only 7,000 Chinese people showed up in Census 2002 with 48,000 refusing to confirm their nationality. I suspect many of these were Chinese, and get ready for a huge increase in the "wont say" category next time. Some people have something to hide methinks.
 

Catalpa

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With the level of PPS numbers issued to immigrants from the NAS in 2005 reaching in excess of 150,000 then the figures given in this report are are clearly bogus in relation to the numbers who will be here by 2020.

Why do people have to engage in falsehoods -sad really! :?

These folks are Dreamers at best if not downright con artists, like can't they count or something?

BTW

150,000 x 14 = 2,100,000.

This projection does not include any immigrants who are arriving here from China, Africa, India, Pakistan, Bangladesh, Brazil etc etc.

The numbers of immigrants living here in 2020 will be far far greater than one million at this rate of change.

No other State on Earth is allowing this level of Immigration relative to it's population for the very obvious reasons that it is neither economically or socially sustainable.

In fact it is clearly unsustainable and I expect a huge political crises will erupt and hit us sometime between now and then - possibly with a lot of violence as well, though I hope to God I am wrong on that point.

Why are we doing this to ourselves? :?
 

doheochai

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eurocrat said:
Article for Todays Irish Times:

[quote:js55gjul]Economists forecast 15 more years of strong growth
Marc Coleman, Economics Editor

The Republic's economy will continue to grow strongly over the coming 15 years as the population reaches 5.3 million by 2020, research published yesterday has found.

In its latest forecast on demographic trends and the economy, entitled 2020 Vision, Ireland's Demographic Dividend, economists from NCB stockbrokers forecast that population and productivity growth will underpin economic growth of 5 per cent over the next 14 years, supporting strong demand across a range of spending categories.
More here:

The article goes on to say that by 2020 Ireland will have a population of 5.3, 20% of which will be migrants.

Some very big challanges lie ahead for Ireland, but our potential is huge. This economic boom is no flash in the pan. We are no course to become Switzerland, if we play our cards right.

PS: I hope nobody PMs me asking me for a log-in for ireland.com. I don't have one, so I don't. Honest...
[/quote:js55gjul]


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