IBEC less gloomy on economy

thebman

Not wanting to change from increasing awareness of our massive budget deficit and need for paycuts but I think we should include some good news or at least positive statements in this forum every now and again.

http://www.rte.ie/news/2009/1030/economy.html

Employers' group IBEC has said the fall in economic output next year may not be as big as was feared, as the world economy pulls out of recession.

In its quarterly economic review, IBEC forecasts that economic output will fall by 1.6% next year, with the economy emerging from recession.

It predicts growth of 1.7% in 2011.
Advertisement

Economist Fergal O'Brien said 'our worst fears may turn out to have been just a little overcooked'.

IBEC still expects consumer spending to drop by 3% next year, though it says unemployment will stay below 14%.

The organisation says the rate of unemployment is being contained by a fall in the labour force, mainly due to the return of emigration.

The body expects exports to provide the main impetus for recovery, growing by 3% in 2011.

leninbenjamin

that's all well and good, but where are the jobs going to come from?

Tipp Man

Look very few economists saw what was coming, hell they were still predicting growth for 2009 in 2008.

Having studied economics for several years i feel its great at looking back, not so great at predicting the future so i take anything that these people say with a pinch of salt unless i see some hard core well reasoned explantions for the conclusions they come to

bamboozle

would it be worth reducing VAT on our exports for a trial period to firstly help boost exports and as a result of increased exports hope for an increase in employment in exporting companies?

just an idea

thebman

Tipp Man wrote: »

Look very few economists saw what was coming, hell they were still predicting growth for 2009 in 2008.

Having studied economics for several years i feel its great at looking back, not so great at predicting the future so i take anything that these people say with a pinch of salt unless i see some hard core well reasoned explantions for the conclusions they come to

Yeah I know, its mostly a talking up attempt IMO as a lot of how well the economy is doing seems to be based on people being confident about it doing well.

AARRRGH

It predicts growth of 1.7% in 2011

It's the end of 2009 already. 2010 is going to be a disaster.

The only way I can see any growth in 2011 is if 2010 is totally screwed, with 2011 being a little less screwed, but still really screwed.

NAMA, emigration, huge personal debt, exodus of multinationals, low consumer confidence, low tax revenue, etc. It's going to be years before things properly pick up again.

leninbenjamin

bamboozle wrote: »

would it be worth reducing VAT on our exports for a trial period to firstly help boost exports and as a result of increased exports hope for an increase in employment in exporting companies?

just an idea

wouldn't make much of a difference. VAT is typically reclaimed within the EU if the purchase was made by a VAT registered company.

ardmacha

NAMA, emigration, huge personal debt, exodus of multinationals, low consumer confidence, low tax revenue, etc.

NAMA may be a burden on the State for a long time, but it does not depress growth in 2010.

Emigration reduces unemployment.

Many people have huge personal debt, most do not. Once it is clear that things are picking up the latter will begin to spend to some extent.

As for multinationals, I would say that as many will come in to Ireland next year as will leave.

ei.sdraob

leninbenjamin wrote: »

that's all well and good, but where are the jobs going to come from?

assuming the US recovers and they continue to invest in our country jobs may come


tho i seriously doubt Ireland is in any way an attractive place to setup a company anymore

and increasing taxes wont help


for example:

the so called "green" taxes and high energy costs will drive datacenter business away, a vital part of so called "knowledge economy" my own company send all our equipment abroad since its too expensive here

bernardo mac

Indeed disaster looms in 2010.Praying and crime rates will soar.Time to jump this rudderless ship of state,even without a lifejacket , unlike the executive fat rats in their private yachts!

AARRRGH

ardmacha wrote: »

NAMA may be a burden on the State for a long time, but it does not depress growth in 2010.

Emigration reduces unemployment.

Many people have huge personal debt, most do not. Once it is clear that things are picking up the latter will begin to spend to some extent.

As for multinationals, I would say that as many will come in to Ireland next year as will leave.

I think you're being a bit optimistic. Most people wouldn't see emigration, risk of miltinationals leaving, huge personal debt, etc. as anything other than bad for an economy.

Time will tell us which one of us is right.

ART6

ei.sdraob wrote: »

assuming the US recovers and they continue to invest in our country jobs may come


tho i seriously doubt Ireland is in any way an attractive place to setup a company anymore

and increasing taxes wont help


for example:

the so called "green" taxes and high energy costs will drive datacenter business away, a vital part of so called "knowledge economy" my own company send all our equipment abroad since its too expensive here

Quite, and a lot of other industries too. We already have among the highest energy costs in Europe and the lunatic Greens demand a carbon tax on top of everything else. They'll soon have us all living in caves and scavenging for berries, and then I don't doubt that Gormley and Co will be banning cooking fires on environmental grounds:(

ei.sdraob

ART6 wrote: »

Quite, and a lot of other industries too. We already have among the highest energy costs in Europe and the lunatic Greens demand a carbon tax on top of everything else. They'll soon have us all living in caves and scavenging for berries, and then I don't doubt that Gormley and Co will be banning cooking fires on environmental grounds:(

green environmentalism taken to its logical conclusion is remarkably similar to fascism and communism


once again if the greens were serious about climate change they would produce less hot air and embrace technologies available now such as nuclear in order to move of carbon based fuels

or for that matter not ban technologies such as genetic modified plans which could be made to produce energy or grow quick, after all selective breeding in "organic" farming is a slower form of genetic manupulation


i come to conclusion that the greens are nothing more than hiippies with a romantic vision of serfs toiling in the fields under their new feudal landlors


edit: found it! the Amish!! thats how the greens want us to be > http://www.fotosearch.com/photos-images/amish.html

leninbenjamin

ei.sdraob wrote: »

assuming the US recovers and they continue to invest in our country jobs may come

I don't think so. What made us an attractive prospect in the first place to FDI was the low costs, both in terms of wages, taxes, grants to offset setup costs etc. At the moment, even with the recession we are still a pretty expensive place to do business. Dell for example decided to abandon Limerick, even though I had heard a few reports that Dell Limerick was one of the most efficient manufacturing facilities they had. Obviously the costs were so great that they offset any gains in margins by keeping Limerick open.

So where does that leave us? Well, until we start rewarding initiative and creativity within our own economy, very little. FDI is great when it comes but, as this recession has shown, it's no substitute for for strong domestically owned industry.

ei.sdraob wrote: »

the so called "green" taxes and high energy costs will drive datacenter business away, a vital part of so called "knowledge economy" my own company send all our equipment abroad since its too expensive here

Good point actually, that side of things never really occured to me before.

thebman

leninbenjamin wrote: »

I don't think so. What made us an attractive prospect in the first place to FDI was the low costs, both in terms of wages, taxes, grants to offset setup costs etc. At the moment, even with the recession we are still a pretty expensive place to do business. Dell for example decided to abandon Limerick, even though I had heard a few reports that Dell Limerick was one of the most efficient manufacturing facilities they had. Obviously the costs were so great that they offset any gains in margins by keeping Limerick open.

We can get other FDI other than putting PC's in boxes though. Any fool can do that so it requires no skillset and English is of little value.

Our current advantages are still access to Europe and native English with ability to attract foreign people who have other languages and English to the country to take on any third language required requirements with freedom of movement in the EU.

So assuming the primary requirement is English speaking and their is or maybe a need for other languages in future we can attract FDI as our biggest competitor is Britain who seem quite vocal on wanting immigration restrictions at the moment which would make them less attractive for this kind of investment I would think.

So where does that leave us? Well, until we start rewarding initiative and creativity within our own economy, very little. FDI is great when it comes but, as this recession has shown, it's no substitute for for strong domestically owned industry.

Correct but that takes time and we never seem to have been very good at it before. Government needs to find out why Irish people don't setup their own businesses and why the businesses we do have are finding it difficult to expand beyond our shores.

Heroditas

thebman wrote: »

Government needs to find out why Irish people don't setup their own businesses

Too much bureaucracy and penal law styled tax regimes make it ridiculously hard to set up a business.
That's what I've been told by anyone I know who has tried to set a business up.

ei.sdraob

Heroditas wrote: »

Too much bureaucracy and penal law styled tax regimes make it ridiculously hard to set up a business.
That's what I've been told by anyone I know who has tried to set a business up.

this ^^^

as someone who had to go thru this experience and jump thru' the hoops of fire


there is alot of paperwork, threatening letters, hidden/stealth taxes and over all a feeling of being shafted for creating jobs and trying to sell product/service

the tax system is aimed at large foreign corporations

for example:

they pay 12% corpo tax (some even 10% or less)

while small businesses pay 12% + corporation tax surcharges which often bringing the tax rate to above 20%

and then theres VAT....

oh and then theres directors loans, which can land you in prison while likes of Anglo directors get away with murder for "resting money in their accounts"


theres no lack of information out there for new buesinesses, the problem is alot of it is written in legalise or accounting english like this here > http://www.revenue.ie/en/tax/it/leaflets/it48.pdf



now compare to starting a company in Seychelles/BVI/etc > send of documents > receive business articles > no taxes > no need to lodge yearly accounts .....