Latest figures indicate worst of recession may be over

nesf

http://www.irishtimes.com/newspaper/frontpage/2009/0903/1224253745900.html?digest=1

Personally I think it's far far too early to be getting optimistic about 'green shoots' but meh, the media always leap on such. Next month's figures (and October's) will show whether we're seeing something illusory.

leninbenjamin

we've a bit to get yet imo.

Contractionary fiscal policy from the government could cause a lot more harm.

For example: there's a lot of companies who are simply ticking over on government contracts out there who have no prospect of seeing them renewed. The complete cut in infrastructure spending has ensured we could see yet another spate of unemployment early next year as.

Secondly, even though dole applications may be falling, there's absolutely no sign of anything on the horizon that might actually create jobs. There's no innovation in this economy, and we're still priced out of the FDI market even if it gets going again...

Économiste Monétaire

Very strange to forecast a recovery based on these tax revenue figures and still rising unemployment.





I wouldn't be surprised to see a jump in unemployment for September-October. What about work visa applications? How much of our unemployment is being shipped abroad (especially amongst recent graduates, youth unemployment is something near 25%)? Retail sales are still negative.

If reporters are looking for positive signs, why not use industrial production and new manufacturing orders; they were quite good and lets hope they don't turn in the opposite direction.

Anonymous1987

Hey it wouldn't be news if it wasn't new, just a few journalist trying to make a headline but if you read through the article you realise pretty quickly that its not really getting better just getting worse a little bit slower.

Euroland

Anonymous1987 wrote: »

just getting worse a little bit slower.

which indicates improvement

Euroland

Économiste Monétaire wrote: »

If reporters are looking for positive signs, why not use industrial production and new manufacturing orders; they were quite good and lets hope they don't turn in the opposite direction.

Yes, industrial production & manufacturing orders + improvements in the national trade balance. When it comes to the unemployment analysis try to create 2 separate charts (histograms), the first with horizontal nods each indicating actual monthly movements (number of people) in unemployment over the last 12-18 months and the second chart (histogram) with the nods each indicating the monthly percentage changes over the same period. And you will see the clear positive signs. The largest monthly unemployment increase happened in January and since then the trend is only downwards.

leninbenjamin

Euroland wrote: »

which indicates improvement

no it doesn't. a fire burning less bright simply means it has exhausted most of the fuel available to it. but it could still smoulder for a long time...

metrovelvet

When do you think this recession will be over?

Euroland

metrovelvet wrote: »

When do you think this recession will be over?

Hopefully by the end of this year-early 2010.

Euroland

leninbenjamin wrote: »

no it doesn't. a fire burning less bright simply means it has exhausted most of the fuel available to it. but it could still smoulder for a long time...

You're too gloomy.

leninbenjamin

Euroland wrote: »

You're too gloomy.

You're too optimistic.

I'm gloomy for one reason, nobody seems to have learned from any of this.

The property market had actually began to correct a year before the sub-prime crises, a full 2 years before Anglo was nationalised, yet that's rarely ever mentioned anywhere in the analysis. That kind of worries me. Instead of wondering why we as a collective society all failed to heed the warning signs, we just look for scape goats to take the fall while we wait for the next big boom. This is evident especially at the government level, where all the opposition do is simply snipe, instead of offering any real viable alternative to our current shambles of a government. "So, Enda, NAMA wont work you say? Then what will?"

I'm just pissed off as well, listening to how the government propose to get this country back on float. They are investing in some experimental telecoms technology, which while promising, wont bring anywhere near the jobs they hope if it ever gets off the ground. They are hoping to replace trade in the IFSC with digital rights and IPs passing through this country's army of lawyers. And they hope the rest of the gap will be filled up with the usual tele-sales, FDI type crap. That's basically all we have to save us for the next 5 years. The same type of superflous jobs that don't add any real value to the economy and will be the first to go next time there's a bust.

As long as we continue like this we're just in for more of the same, boom, bust, boom, bust, an economy continually on the brink.

mr.interested

nesf wrote: »

http://www.irishtimes.com/newspaper/frontpage/2009/0903/1224253745900.html?digest=1

Personally I think it's far far too early to be getting optimistic about 'green shoots' but meh, the media always leap on such. Next month's figures (and October's) will show whether we're seeing something illusory.

Recession is a very compound issue. Nobody knows when it stars, how long it lasts, and finally, when is over - you can just guess. To me the recession is as if you're walking in the mountains with eyes covered - you have no idea where the summit is.

What is certain is, however, that if we still continue running on fiat money, government's bailouts, rising taxes to cure recession, etc. we will be still in the base of a mountain.

Stabshauptmann

Ok so there were less insolvencies this month than last month, but still one of the worst months this year and way worse than previous years.

Source: insolvencyjournal.ie

But thinking of companies going under, am I right in thinking that the volatility in the banking sector has passed?

The first big banking problem in Euope (in this recession) was Northern Bank in Sep 07.
They were badly hit by the sub prime collapse. Large european banks such as UBS, SocGen, HSBC, Credit Swisse suffered massive writedowns.
Then Bear Sterns collapsed in March 08 due to the ensuing credit crisis, Lehmans in June, and in September and October they were dropping like flies. AIG got one of the biggest dig outs ever and we introduced our bank guarentee scheme on 30 Sep 08 to protect the 6 Irish banks. This didn’t save Anglo which was nationalised in Jan 09 partly because of credit problems, but ultimatly due to a poor business model.

But since then, am I wrong in thinking 8 months have passed without any significant scare in the banking world?

thebman

I think they need to look intelligently at government contracts they intend to cut. Little point if they end up paying just as much in dole payments to people as the contract costs.

Certain infrastructure projects just need to be done and cannot be delayed. Others could be scrapped altogether but won't be like the national broadband scheme which is a diaster and won't achieve its goals anyway.

nesf

Stabshauptmann wrote: »

But since then, am I wrong in thinking 8 months have passed without any significant scare in the banking world?

Ish but in fairness expectations in/about the banking sector are so low that to create a scare someone like AIB would have to turn around and say "Eh, guys, we kinda borrowed all the depositor's money and lost it in Monte Carlo.."

dresden8

nesf wrote: »

http://www.irishtimes.com/newspaper/frontpage/2009/0903/1224253745900.html?digest=1

Personally I think it's far far too early to be getting optimistic about 'green shoots' but meh, the media always leap on such. Next month's figures (and October's) will show whether we're seeing something illusory.

I wouldn't get too excited by the Live Register numbers yet. It usually falls around this time of year.

http://www.cso.ie/releasespublications/documents/labour_market/2008/lreg_sep2008.pdf

Fell in September 2008 to 240,217.

Now stands at 440,056.

Amhran Nua

I don't think there is much to indicate the recession is over in Ireland, in fact the worst is possibly yet to come:

Half of small firms plan to close or shed jobs
ALMOST half of small businesses expect that they will either have to close down, restructure or shed jobs in the next three months.

The Small Firms Association’s (SFA) Autumn Business Sentiment Survey found that seven out of 10 small businesses rate the current business environment as "poor" or "very poor".

SFA director Patricia Callan said: "The overall survey results show that small business owner-managers are more positive for the second quarter in a row; however many remain under serious pressure."

In terms of business structure, 44% of companies indicated that they will restructure, decrease in size or close down in the next three months. The results show that two thirds or 67% of the 684 survey respondents rate the overall business environment as "poor" or "very poor", while slightly fewer, 60%, expect it to remain so in three months’ time.

The percentage of companies rating the overall business environment as either "good" or "average" rises from 24% for the last three months to 34% in three months’ time, with 29% rating the overall business environment in Ireland as "good" or "average", highlighting a more positive outlook among respondents.

Internationally the situation isn't much better, even with reports of Germany and France exiting recession, China still experiencing growth and so on - these are the results of stimulus packages and in the case of Germany at least helped along by China dumping as much of their USD as possible, buying up plant and getting their own credit bubble running.

Especially worrying is the news that Chinese exports are still collapsing, which is noteworthy because the Chinese could be said to be the primary producers of low end low cost goods for the rest of the world. If those products aren't selling, how much hope is there for the rest of the higher cost products?

The bandaids will only staunch the flow for just so long, there really can be no such thing as a jobless recovery. What it looks like is that governments and the media are trying to treat the broader economy like a stock market, where confidence is key. Unfortunately the broader economy works on different criteria.

Hasschu

It won't be over until the fat lady has successfully dieted.

See link attached.

Note the comments on small countries in Europe, that is us. Do you see the gov't having the backbone to mete out the tough medicine. Or do you see withdrawal from the EU and a 66% depreciation of the new Punt against the Euro. Or to put it another way, do you see the Irish people being willing to make the sacrifices that have to be made. My inclination would be to put any liquid assets in any currency except the Irish Euro or Irish institutions at home or abroad.

http://www.theglobeandmail.com/news/opinions/desperately-seeking-an-exit-strategy/article1288905/

thebman

Well withdrawing from EU is not an option, it won't even be entertained by the public or the media.

I think things are only going to get worse when it becomes apparent that our government can't sort things out and our businesses can't survive because they can't get credit.

nesf

Hasschu wrote: »

It won't be over until the fat lady has successfully dieted.

See link attached.

Note the comments on small countries in Europe, that is us. Do you see the gov't having the backbone to mete out the tough medicine. Or do you see withdrawal from the EU and a 66% depreciation of the new Punt against the Euro. Or to put it another way, do you see the Irish people being willing to make the sacrifices that have to be made. My inclination would be to put any liquid assets in any currency except the Irish Euro or Irish institutions at home or abroad.

http://www.theglobeandmail.com/news/opinions/desperately-seeking-an-exit-strategy/article1288905/

I can't see us leaving the Eurozone. We'll have to do it the hard way through salary cuts I'm afraid. I can't see this Government having the backbone to try and push through the level of public spending cuts needed and honestly I've a lot of trouble seeing a Government involving Labour agreeing to them either.

thebman

Which also means many people not being able to pay their mortgages when interest rates rise or even before then depending on tax increases too :-/

What is the average Irish wage earners breaking point?

Amhran Nua

thebman wrote: »

I think things are only going to get worse when it becomes apparent that our government can't sort things out and our businesses can't survive because they can't get credit.

The majority of non-construction businesses don't need much credit. The country needs jobs, not loans, and thats where the focus should be.

thebman

Amhran Nua wrote: »

The majority of non-construction businesses don't need much credit. The country needs jobs, not loans, and thats where the focus should be.

yes they do especially new start ups which is what we need in a recession when existing businesses are closing down, we need new viable businesses to start up to replace lost jobs. New start ups need loans to get started.

Amhran Nua

thebman wrote: »

yes they do especially new start ups which is what we need in a recession when existing businesses are closing down, we need new viable businesses to start up to replace lost jobs. New start ups need loans to get started.

Ah but there is a big difference between new startups and what has been toted in the media as a seizure of the wider economy due to the credit crunch. You are assuming as a given here that most established businesses have already collapsed, which is not the case. Better to keep whats there in place perhaps?

If a business (with the exception of construction which operates on a unique business model) requires ongoing credit to maintain its operations, it would be difficult to describe it as a business as such, as it would not be profitable in any case.