[Article] Manufacturing employment falling steadily in Ireland

DublinWriter

Cork wrote:

Encouraging a savings habit was an inovative iniatative that Charlie McCreevy deserves full credit.

Some Irish people suffer from sheer financail stupidy. Encorageing people to save is better than a spend and borrow behaviour patterns enjoyed by many.

FF's own Haughey being the prime example of this.

Encouraging people to save is one thing, giving away 'free' money to encourage people to save is another.

McCreevy deserves full credit for a very clever attempt to 'buy off' the Irish electorate. 80% of SSIA's will mature next February and I'd bet any money that Bertie calls an election no more than eight weeks later.

I think the whole 'SSIA-effect' will backfire on FF - putting that amount of money suddenly into consumer circulation is like trying to put a fire out with petrol in terms of our already high rate of inflation.

You really are living in la-la land if you think the SSIA scheme will make a greater number of people save.

The money will fly right out of the country as people spent it on holidays and plasma TVs.

Come next year people will see SSIA's for the cynical vote-buying attempt that they were.

constitutionus

ive got a SSIA and i can tell you its not influencing my vote in the least so ta for the money bertie and dont let the door hit your arse on the way out:D

im really interested to see what happens next year, one of the reasons the SSIA was set up (besides to buy the election) was to keep inflation down, which was starting to go mental then, now were in the situation where 80% of 16 billion will come on stream all at the same time. and thats not including the extra money people will be spending now that the schemes over, i predict inflation will go through the roof. i can tell you for a fact i for one already know what i intend to blow my SSIA on and it'll cost the full 20k i'll have saved. cant wait to be able to spend the 250 a month im putting away at the moment as well cause in case you havent noticed we are the most expensive country in western europe. with bills going up left right and centre the gov have two chances of a "savings culture" and slims just left town, ditto for puting it in a pension. of course a few will but the vast majority of this money is gonna be spent by christmas. word to the wise, you need work done on your house get it done now. you wont get a trades man for love nor money next year and the cost will be double

DublinWriter

constitutionus wrote:

word to the wise, you need work done on your house get it done now. you wont get a trades man for love nor money next year and the cost will be double

Damn right. We're trying to get the place re-plumbed now and can't even find a decent plumber, Irish, Polish or otherwise.

constitutionus

DublinWriter wrote:

Damn right. We're trying to get the place re-plumbed now and can't even find a decent plumber, Irish, Polish or otherwise.

heard a rumour alot of thats down to people getting loans againts their SSIA so they can get work done now and hand the cash over to the bank when it matures in a year. maddness

Hotblack Desiato

DublinWriter wrote:

Encouraging people to save is one thing, giving away 'free' money to encourage people to save is another.
McCreevy deserves full credit for a very clever attempt to 'buy off' the Irish electorate. 80% of SSIA's will mature next February and I'd bet any money that Bertie calls an election no more than eight weeks later.

This is utter bollox.

SSIAs are nothing more than standard rate tax relief on the sum invested. A shock to the system in dear old Ireland where small savers traditionally get raped by the tax system, but nothing at all unusual in more progressive economies.

Jackie laughlin

Cantab,
I'm off on holidays soon. Should you happen to come on-line, could you oblige by having a look at my last questions to you. I'm very interested.

Diaspora

ninja900 wrote:

SSIAs are nothing more than standard rate tax relief on the sum invested. A shock to the system in dear old Ireland where small savers traditionally get raped by the tax system, but nothing at all unusual in more progressive economies.

Standard Rate tax is 20% of income and subject to PRSI and is deducted at source from earnings whereas this is a 25% top up on income howsoever derived either legitimately or otherwise it involves taking funds from taxpayers and giving to all comers and unlike a tax allowance it involved paying out regardless of what the prevailing economic conditions were.

silverharp

The government should be mindful that the Irish economy carries a lot of risk compared to countries like Holland or Switzerland which have built up a lot of capital and intellectual capital over the years. Just because Irish GDP is high now (and overstated due to transfer pricing) there is no guarantee that the drivers of success will remain and any country whose costs base compounds faster then output deserves and will get a hammering.
Ultimately the global corporates and consumers doesn’t care about the price of housing or energy costs in Ireland, if the price isn’t right they will move on.
The gov should also be mindful that the a high % of gov tax comes form taxing debt (property) and foreign multinationals which are subject to legal changes. What if the US were to lift the veil on transfer pricing and tell Coke Cola for instance that it had to pay US corp tax on its operation in Ireland. Hopefully we can retain our role as the “Jersey” of Europe but other countries may not allow this

Cantab.

Jackie laughlin wrote:

Cantab,
I'm off on holidays soon. Should you happen to come on-line, could you oblige by having a look at my last questions to you. I'm very interested.

Hi Jackie. I'd be very happy to reply to you. Firstly, regarding SSIA money that everyone seems to be talking about, I'm in no doubt that this money will pour out of this country just as fast as it came in (I'm thinking japanese LCD TVs, chinese garden furniture, japanese cars and shopping trips to New York). People my age have never known bad economic times (let alone prudent economic times), and sooner or later it's going to go pear shaped. There's no point in living this debt-fuelled life of exuberance (that many of my peers have), as it's an unsustainable fantasy-land that must one day be paid back.

Jackie laughlin wrote:

Cantab,
I really do apologise if I'm being a pest but could I try your patience a bit further. You are quite a source!

Your company employs graduates. You say that Irish wage costs are going through the roof. Does this include people in your position? (I'm not suggesting that you are well off!) Are the wages paid to you and your colleagues making the company uncompetitive?

I would say that the national pay agreements are certainly making the company uncompetitive. I had a friendly chat with one of the senior engineers on the DART home one evening and he basically said that generous pay agreements could kill us off altogether. Irish graduates are relatively cheap, I guess, but eastern european/chinese/indian engineers are cheaper. Irish engineers can be good, but many are lazy and have poor work ethic. The foreigners on the other hand have that hard-graft mentality where they are delighted to be working in a company that pays them 3-10 times what they'd earn at home and get to learn English at the same time.

So what does all this mean? Basically what I am saying is that the tech sector in Ireland (from my perspective) is driven by imported expertise and not indigenous. Ireland is not capable of driving this knowledge economy on its own because we're not getting enough young people studying engineering/computers/physics relative to demand (there's more money in building houses - no wonder there's more girls going to university because the boys make better money house building). The higher the cost of living gets, and the worse our infrastructure gets (because of poor planning), the less desirable a location Ireland becomes. If this negative sentiment gets out amongst the migrant workers, then they will stop coming and go to pastures greener. Other countries have copped on to Ireland's economic wonder-recipe and are offering more attractive packages to companies.

Jackie laughlin wrote:

On the other hand, you talk about the building being expensive. Is it wages to engineers/technicians that is causing the problem, the cost of the lease or both?

The cost of the lease will be huge if it's renewed in 2008 (there's no way it will be renewed at current prices). Wages and services costs will undoubtedly have gone up by at least 10-15% by then.

Jackie laughlin wrote:

Incidentally, a part of the success in bringing industry to Ireland was based on providing low cost or no cost premises.

Could I put a political thought to you? Our failure to distinguish between different types of capitalist is hurting us. Profits from a building industry/market out of political control seem to be at the expense of other industries struggling to keep/attract workers at reasonable levels of pay.

I would agree with this. The interest in technology is nothing compared to the vested interest in land-owning and property development. Considering Ireland has one of the lowest (if not the lowest) population densities in Europe, it's surprising that there's a land shortage and that property prices are akin to those in the major established European capital cities with much larger populations/economies. I wonder how the economy would look if FF party members were large technology shareholders?

Jackie laughlin wrote:

I think you may have put your finger on a more sophisticated response to the private sector Vs public sector pay debate. I'm beginning to think that, while lower level public servants are appallingly paid, the middle to upper remuneration may have gone crazy. This might be related to the fact that "managerial" salaries generally have gone crazy based on false claims about the market or the going rate, when it's just an old fashioned relativity claim.

Yeah, it's a big issue alright. I would seriously consider a position in the civil service, given the favourable working hours and pension schemes. If the economy goes belly up, I'll have to emigrate. It would be nice to have the job security.

Jackie laughlin wrote:

Another "incidentally", I had a dilemma similar to yours when I was younger: a creative job which I loved Vs a highly paid managerial job requiring little or no engineering expertise.

Perhaps it's the nature of the game? In China, all the top politicians are engineers! We should be valued more! The economic output of an engineer must be several factors higher than that of an accountant, lawyer, civil servant...

We can't live on stamp duty, VRT and borrowed money from German pension funds forever.

Jackie laughlin

Cantab,
Many thanks for that. It was really useful.

By the way, in the 70s and 80s engineers tended to dominate management ranks. They've been ousted by other professionals in the last couple of decades. It's always been a kind of rolling demarcation dispute or a rough test of the strength of various professional bodies. The Dail tends to be dominated by publicans, farmers, auctioneers and to a lesser extent teachers.

I have a problem with the failure or inability of professionals and young educated people particularly to think politically - perhaps I mean "critically". I've no problem with their disagreeing with me but they seem so often to be convinced by whatever views happen to be popular, no matter how daft those views might be.

I hope you don't have to leave.

Thanks again.

Hotblack Desiato

Diaspora wrote:

Standard Rate tax is 20% of income and subject to PRSI and is deducted at source from earnings whereas this is a 25% top up

:rolleyes:
If standard rate tax is 20%, then you're left with 80%. To give standard rate tax relief on that sum, you'd need to increase it by one-quarter to get back to 100%.

on income howsoever derived either legitimately or otherwise

Oh come on, it's hardly offshore accounts all over again. The money has to be in an Irish on-shore institution, PPSN supplied etc. You'd have to be pretty thick to route hot money into one tbh.

it involves taking funds from taxpayers and giving to all comers

The reason for the 25% bonus was to give a benefit equivalent to standard rate tax relief to non-taxpayers. Would you begrudge it to, say, pensioners, sticking a few euro away?

and unlike a tax allowance it involved paying out regardless of what the prevailing economic conditions were.

Tax allowances were let continue for years, e.g. property reliefs even at the height of a construction boom. At least the SSIA had an in-built cutoff date.

Diaspora

Dairy processing set for €300m investment

28 July 2006 12:49
The dairy processing sector is set for a €300 million investment over the next few years.

The Minister for Agriculture, Mary Coughlan, said the Government would contribute a third of the finance to reinvigorate the sector if the industry comes up with the remainder.

Ms Coughlan said the much-needed injection of capital would go a long way towards the development of a modern, innovative and highly efficient food sector in Ireland.

She said there has already been a hugely positive response to the initiative from within the industry.

And she said farmers should greatly welcome the investment which should enable them to secure a fair return for their important contribution to the supply chain.

The dairy business remains one of the most important industries in rural Ireland - with exports worth €1.5 billion annually.

The raw material is provided by about 20,000 dairy farmers and the end-product is marketed right around the world.

Despite the success of the industry over the past 30 years, it is now under pressure because of cuts in EU subsidies and stiffer competition on global markets.

Various reports have called for the industry in Ireland to increase scale and to achieve greater efficiency and better use of processing facilities.

That article is criminally light on specifics

redspider

A report from the State advisory body Forfás says that employment in the manufacturing sector has dropped by 13%, or 31,000, since reaching a peak in 2000. Despite this, the body says the sector is still contributing significantly to economic success, with output up 28% in the same five-year period.

Two things to think about. The first is that Manufacturing output has increased 28% in 5 years. Most of it from multi-nationals. Many of these MNC's are producing more than they would if they were accounted for accurately, but 'transfer pricing' as it is called, means that it is possible for employees to produce millions of value per annum. It is false accounting but totally legal and is advantageous for tax reasons. The figures have to be taken with some quantity of sceptism therefore. Reality is different.

Another thing is that the stats dont count internationally traded services in the same way as internationally traded manufacturing. An MNC that is here and provides services and an MNC that is here and manufactures, in some cases such as Microsoft, Oracle and other software companies, manufacturing needs to be written in quotes, is providing the same type of input into the economy. Both business are moveable, although that is the case for many businesses whether MNC or indigenous, they are also moveable.

Some services cant be moved out of the country as they are delivered locally and in person, eg: Health, Lesiure, etc. Most of retail also cant be moved and as much as we would like to outsource the Civil Service to eastern europe (now thats real decentralisation) it just aint gonna happen.

Of course, the over-reliance on the property 'frenzy', as I like to term it, is a big big danger. It cant go on but how and when it ends are two big questions. Everyone is hoping for the soft landing that is manageable. A lot will depend on that unforecastable element, Human demand. If the majority decide to sit it out and wait it could be a devastating crash where negativity breeds negativity, lack of investment, a slow down etc. Not the end of the world but just think of 10 years in stagnation - ie: the 1980's all over again. World factors and external factors have a huge bearing. MNC's staying here is helping. Cheap new-EU-land labour is helping.

ESRI are calling it coming to a halt in 2008.

Forfas will have some interesting reports when it does, if it does. The question is whether that if is a big IF or really a when .... only time will tell.

redspider

Cork

The recent annoncement of ESB and gas price hikes will do nothing to attract manufacturing industry.

It is crazy - how dependent this country is so dependent on construction.

Interest rates going up again.

The Irish paying thru the nose for crap houses in crap locations.

These people buy houses miles and miles from their place of work and then give out about fuel prices.

These people buy houses miles and miles from hospitals, schools and decent roads. They then expect government at local and central level to step in.

We live in a country that is sinking in personal debt.

We might even get another year of boom with the SSIAs.

Many may even squander these as well.

Ah still, vat reciepts will be up.

DublinWriter

Cork wrote:

These people buy houses miles and miles from their place of work and then give out about fuel prices.

These people buy houses miles and miles from hospitals, schools and decent roads. They then expect government at local and central level to step in.

Yes they do because THEY DON'T HAVE A CHOICE!!! Geddit? They can't afford half-a-mil plus to live in the average semi-D in Dublin.

Thanks to the brown-baggism and lack of urban planning of your favourite party Cork, that is the situtation people have been forced into.

Hotblack Desiato

I don't buy that argument.
People DO have a choice - between a smaller or less attractive house or apartment in a more convenient location for commuting and amenities, or Deh Big House Down De Countreh. Eventually they wise up to the fact that, while the house may be lovely, living there and working a long way away has serious disadvantages.
What they don't realise is that getting the foot on the first rung of the Dublin property ladder is the hard part. Trading up in a few years from your less-than-ideal first home is a lot easier than buying the first home.

Cork

DublinWriter wrote:

Thanks to the brown-baggism and lack of urban planning of your favourite party Cork, that is the situtation people have been forced into.

Poor planning cannot be put at the door of any one party.

The party that you refer to was trashed at local elections - people are still buying houses situated in the back of the beyond.


They then rant about petrol prices.

Our manufacturing sector cannot compete because of inefficency.

Costs are cheaper elsewhere.

Will the Irish work for the same wage rates as the Eastern Europeans?

The recent national agreement would say "No".

It is no wonder many manufacturing companys have left.

If this country had not an english speaking labour force and low coperate taxes - we would have been down the tubes years ago.

Looking at the paper yesterday- the vast majority of jobs do not justify prices paid for houses.

Even with two people working, deposits from parents - the bubble will bust.

Even warnings of rising interest rates seem to be ignored.

Hotblack Desiato

Cork wrote:

Costs are cheaper elsewhere.
Will the Irish work for the same wage rates as the Eastern Europeans?
The recent national agreement would say "No".

Ah, right, blame the workers.
You can't honestly think that people should, or could afford to, work for 2 or 3 euro an hour given the cost of living in this country.
The proposed national agreement may well turn out to be less than inflation.

DublinWriter

ninja900 wrote:

I don't buy that argument.
People DO have a choice - between a smaller or less attractive house or apartment in a more convenient location for commuting and amenities, or Deh Big House Down De Countreh. Eventually they wise up to the fact that, while the house may be lovely, living there and working a long way away has serious disadvantages.

Crap. Would you bring 2 or 3 kids up in an apartment?

Consider two Civil Servants at CO/EO level, both *jointly* earning about €80k with two kids.

Go find me a house in the greater Dublin area that would be affordable to a couple in this situation, considering creche fees will reduce their earnings by about 20K.

DublinWriter

Cork wrote:

Poor planning cannot be put at the door of any one party.

How about the party that has been in power for 17 of the last 20 years?

...or maybe you'll scapegoat FF's minority coalition partners?

Cork wrote:

The party that you refer to was trashed at local elections - people are still buying houses situated in the back of the beyond.

And will be trashed at the generals next year.

Schuhart

DublinWriter wrote:

Consider two Civil Servants at CO/EO level, both *jointly* earning about €80k with two kids.

I’m not clear on what you regard as affordable for people such as you describe. I went looking on myhome.ie for 3 bed dwellings in Dublin for 250,000 or less (which would get you a 4 bed semi or 3 bed cottage in Carlow), on the assumption that this was what you had in mind. Two properties in Darndale and one in Tallaght are available.

If we take the one in Tallaght (as I’d imagine – perhaps wrongly – that you would see living in Darndale as being less attractive than living in Democratic Kampuchea) then we can see it is affordable for the people you have in mind.

First save 20,000. By, for example, not having an extravagant wedding, not having your car fitted with a sound system best listened to at a distance of five yards and not getting legless for a few months.

According to PermanentTSB’s website, borrowing 230,000 over 30 years costs about €1,100 a month. Anyone with a brain will, of course, buy their house before having sprogs. But even if their income is reduced by 20,000, this repayment would still look affordable.

Houses might not be affordable in prestige locations. But people on moderate salaries don’t have to leave Dublin to find affordable properties.

spanner

It seems that know matter how good we preform as an economy and how well everything goes for people in this country there are still people saying that we are doing terrible, we lazy and uproductive.
However the statistics prove otherwise,The most productive nations (Dirk Pilat, OECD) study rates us as one of the highest rates of productivity in Europe and well over America. The economist, using global statistics as ref rated us as they place to live. I have just read David Mc Willams book, the popes children in which he uses many statics to back up his point that Ireland is undergoing sustainable growth in many areas, However if you read posts like this you would think this is a underpreforming economy that somehow got lucky and is doing well.

Diaspora wrote:

No they just didn't invest enough in promoting research and development like the Swiss Swedes and Dutch to attract the type of projects that are unable to locate in Asia. The lack of investment in sectors where the brain work is done by small teams in studio environments and the manufacturing outsourced is severly hamprered by a lack of investment in design colleges such as NCAD this directly costs jobs as those who wish to pursue such a career go to Paris or London and rarely if ever come back.

Inflation is the highest in the Eurozone and with construction and domestic consumption stripped out the economy is going backwards. Remember that 1980 had the new car sales record until 1995 there is always a bubble first.

Yes the economy will not continue to grow at this rate, especially construction. The very nature of construction is that they move to where the work is. You might find all these 1000s of foreign construction workers in some other country that is experiencing a boom when the construction industry slows down next year.
Low skilled manufacturing is moving out of western Europe for quite sometime and their is little or nothing you can do to stop this. We need a better immagration policy that allows these people who are cleaning rooms in hotels to transfer their degree and high level qualifications from their home countries to ireland, we really need to encourage high skilled labour and discourage unskilled workers from coming in. The government really need to make a long term commitment to the education system and see why we are having such problem as high 3rd level drop out rate, why some kids are coming into courses without the required level of maths english and science needed for their course and why is Irish still compulsory when it is obiviously not working at promoting the language or benefitting childrens over all educational experience. We have a good educational system but with a few changes we could have a great one.

I think if we can address these issues, focus and use our strengths and stop listing our weaknesses when the slow down comes it will not be has severe as all

Cork

DublinWriter wrote:

How about the party that has been in power for 17 of the last 20 years?

Rezoning land for housing is done by local government.

Never has there been more houses been built in this country.

House price inflation is crazy. This is down to the open market.

The cost of doing business in Ireland is pretty high.

The Irish Examiner had a report last week on products in Ireland Vs the UK. We are paying more.

It is not about the Groceries Order but the costs of doing business here.

Irish people are borrowed to the hilt. Their debt levels are crazy.

No government can be blamed for this.

Rising interest rates will not even set off alarm bells for such people.

Untill this country gets it's costs under control - more manufacturing jobs will be lost.

ESB Hikes, Gas Hikes etc will only hasen the decline of Irish manufacturing.

DublinWriter

Cork wrote:

Rezoning land for housing is done by local government..

Who are in turn led by councellors, the majority of which in the past 20 years have been FF.

Cork wrote:

Never has there been more houses been built in this country.

...without adequate infrastructure such as schools, parks, shops, etc.

Cork wrote:

House price inflation is crazy. This is down to the open market.

Because FF abandoned the idea of social housing and just threw the whole show to the market.

Cork wrote:

The cost of doing business in Ireland is pretty high.

Really? I could have sworn we had one of the lowest corporate tax rates in the EU for the past ten years? Did I miss a meeting? And besides, ever try setting up shop in either France or Germany? Tons of red tape and militant unions.

Cork wrote:

The Irish Examiner had a report last week on products in Ireland Vs the UK. We are paying more.

Reasons including a) We are paying more on wine and spirts because of the extra duty. b) We are paying more on cars because of VRT. Both are double taxations that FF have refused to review.

Cork wrote:

Untill this country gets it's costs under control - more manufacturing jobs will be lost. ESB Hikes, Gas Hikes etc will only hasen the decline of Irish manufacturing.

Screw the manufacturing jobs, they're gone. How can Ireland even begin to compete with China and India when it comes to labour costs? The future for Western Europe is the service economy.

Diaspora

DublinWriter wrote:

Because FF abandoned the idea of social housing and just threw the whole show to the market.

There is no such thing as an open market when the state subsidises infrastructural provision and creates value by administering land use zoning.

There are only degrees of regulation and Ireland is the least regulated country in Europe when it comes to regulating property.

Cork

DublinWriter wrote:

Screw the manufacturing jobs, they're gone. How can Ireland even begin to compete with China and India when it comes to labour costs? The future for Western Europe is the service economy.

We cannot compete with India, China or Poland.

Poland is more central. They have an educated work force. They will replicate the Irish coperate tax rate.

Look at Ireland;s inefficent public sector.

The construction industry is the engine to the economy.

We are completely dependant upon it.

The Eastern European economies are the ones to watch.

Diaspora

There are many projects at a higher level that are being lost to rival economies such as Sweden Finland Switzerland UK that if we had a decent infrastructure could be won.

Comparison with Poland etc is not an issue the cost base is not comparable as evidenced by Masters graduates lugging bricks on Laois building sites.

Construction is a good money spinner but you need occupants to make property viable and without foreign income there is not enough money to repay the Bund

shoegirl

irish1 wrote:

The fall is worrying for the long term outlook of our economy, the number of low skilled people workng in our building sector is especially worrying.

...especially when many of those low skilled builders, some of whom can barely read nor write, are earning 2 to 3 times what higher skilled clerical workers earn.

shoegirl

Schuhart wrote:

I’m not clear on what you regard as affordable for people such as you describe. I went looking on myhome.ie for 3 bed dwellings in Dublin for 250,000 or less (which would get you a 4 bed semi or 3 bed cottage in Carlow), on the assumption that this was what you had in mind. Two properties in Darndale and one in Tallaght are available.

If we take the one in Tallaght (as I’d imagine – perhaps wrongly – that you would see living in Darndale as being less attractive than living in Democratic Kampuchea) then we can see it is affordable for the people you have in mind.

First save 20,000. By, for example, not having an extravagant wedding, not having your car fitted with a sound system best listened to at a distance of five yards and not getting legless for a few months.

According to PermanentTSB’s website, borrowing 230,000 over 30 years costs about €1,100 a month. Anyone with a brain will, of course, buy their house before having sprogs. But even if their income is reduced by 20,000, this repayment would still look affordable.

Houses might not be affordable in prestige locations. But people on moderate salaries don’t have to leave Dublin to find affordable properties.

I would strongly agree with this, but the problem for a lot of young people is the old catch22s - do you stay in education during early career years, only to find yorself overtaken at 30 by the guys who went straight out to work at 17 - or worse still, find your qualifications obsolete or even useless? (I estimate that at least 2/3 of all 3rd level qualifications are not given any value at by business or industry). Do you learn to drive so you can get more relevant jobs 20 miles away but end up spending the extra wages of tens of thousands on tax/insurance and petrol or car loans?

Then there is borrowing - a very heavily borrowed person on an average wage would now probably find themselves considerably worse off than the average loafer on the dole.

bonkey

shoegirl wrote:

(I estimate that at least 2/3 of all 3rd level qualifications are not given any value at by business or industry).

Whereas I estimate that 99% of unsupported statistics are inaccurate and made up on the spot to add pseudo-weight to an argument.