Good economic news thread

Godge

fxotoole wrote: »

Too much personal debt, especially beyond a person's ability to pay it back is what got us into the state we're in today/

http://www.centralbank.ie/polstats/stats/summarychart/documents/ie_financial_statistics_summary_chart_pack.pdf

Charts 1,7,8 and 9 in the attached would show you that overall indebtedness of the Irish consumer is still going down, which is good, considering the levels it was at.

What is also good, is that the new car sales figures would indicate is that those individuals who are ahead of the curve have started to borrow again, which is very good for the economy.

The only thing that would be a worry would be if those who have had mortgage write-offs are borrowing as they would have learned nothing and will be back to the taxpayer for another hand-out in a few years.

Head The Wall

http://m.independent.ie/opinion/comment/burtons-way-or-brussels-way-theres-only-ever-going-to-be-one-winner-there-joan-30323529.html

So it appears as if the EU isn't buying our miraculous recovery as reported by the govt



And what of the detail of yesterday's report? The eurocrats had no shortage of criticisms of swathes of government.

Michael Noonan's Department of Finance is scolded for not spelling out more fiscal specifics and for what the commission believes is its too-rosy assumptions about the future. "The achievement of the budgetary targets is not supported by sufficiently detailed measures for 2015," the study said, adding that "the authorities' forecast for the later years of the programme are optimistic (and) medium-term budgetary plans are not supported by well-specified adjustment measures."

There are also questions raised about the most basic aspects of the tax system. The Commission is critical of how work is taxed. "Labour taxation is fragmented and complex," it notes, while the way Ireland taxes consumption also comes in for comment. "Reduced VAT rates are not an efficient and well-targeted policy tool to protect vulnerable groups," it states in an implicit suggestion to move towards one VAT rate for all goods and services, as is the case in some other countries.
- See more at: http://m.independent.ie/opinion/comment/burtons-way-or-brussels-way-theres-only-ever-going-to-be-one-winner-there-joan-30323529.html#sthash.FJbGPoTX.dpuf

Frank Lee Midere

The real issue is increased interest rates in the future. If interest rates tend towards 5-6% then the typical tracker mortgage will start to cost 2000-3000 for a boom time house. The domestic economy will collapse.

Sand

While that would be game over (it would imply an increase in sovereign bond debt servicing costs as well) 5-6% interest rates on trackers are unlikely for the foreseeable future. The ECB's main problem is inflation is so low that it is not meeting its target of near to 2%. It would require a huge, broad recovery across the Eurozone (or at least Germany) before the ECB starts hiking interest rates again.

That is also not very likely given every state is engaged in austerity and keeping zombie banks propped up. But I have to presume with the crazy fanatics of Trichet and Co out of power, the ECB will be slow to risk choking off a recovery by hiking rates too soon.

Sand

Head The Wall wrote: »

http://m.independent.ie/opinion/comment/burtons-way-or-brussels-way-theres-only-ever-going-to-be-one-winner-there-joan-30323529.html

So it appears as if the EU isn't buying our miraculous recovery as reported by the govt[/url]

Not too surprising - the government and the green jersey brigade have been predicting for each of the last 7-8 years that *this* year is *the* year that the recovery will kick on.

Now eventually, they'll be right. Eventually.

Flex

Godge wrote: »

The ESRI report was a load of rubbish, similar to many of those type of reports from them. They get some things right but some stuff way wrong. Another example was their work on the incentive to work.

Why was it a load of rubbish? CSO produced rubbish too?

Edit : I actually wasn't even commenting on the findings of the reports, rather that I'd like to see public money spent a bit more intelligently. Doesn't matter though, based on Brendan howlins recent announcement

Phoebas

Another small bit of good news:
Fitch upgrades Ireland's credit rating to 'A-minus' from 'BBB-plus'.

http://in.reuters.com/article/2014/08/15/ireland-ratings-fitch-idINL4N0QL4N520140815

1huge1

Very good to see.

Their expected GDP for this year is in line with the department of finance at 2.7% growth this year, but only c.a. 2% next year. I'm assuming thats more due to the underlying issues in the Eurozone rather than domestic issues at this stage (not to say we don't have domestic issues by any means).

washman3

Phoebas wrote: »

Another small bit of good news:
Fitch upgrades Ireland's credit rating to 'A-minus' from 'BBB-plus'.

http://in.reuters.com/article/2014/08/15/ireland-ratings-fitch-idINL4N0QL4N520140815

Yet anytime during the last few years our credit rating was downgraded Fitch were rubbished by Kenny, Noonan and the 'Green Jersey Brigade'
If the cap fits wear it I suppose...:rolleyes:

1huge1

washman3 wrote: »

Yet anytime during the last few years our credit rating was downgraded Fitch were rubbished by Kenny, Noonan and the 'Green Jersey Brigade'
If the cap fits wear it I suppose...:rolleyes:

Of course, thats what politicians do...

What is more important now is that more pension funds etc will have access to Irish bonds, many of them are not allowed invest in countries that have anything less than an A rating.

I doubt it will have any real effect on our yields though due to the ECB helping to keep them at artificially low levels.

Rucking_Fetard

Fitch and S&P are pure Bullsh1tters of the highest order and any report from them is not even fit to wipe your ass with.

Bit like Met Eireann.

washman3

comongethappy wrote: »

Taking on debt isn't necessarily a bad thing.

We took on €17k debt to buy a new car in 2011....we're making the payments easily & hope to pay it off early.

I don't get the assumption that borrowing = wrong.

Taking on other peoples debt is a problem.!!
Would you fancy borrowing another €17k for a car and giving it for free to your neighbour.??
Because that in effect is what our leaders did when they saddled all of us with the debt of a minority.

Phoebas

Rucking_Fetard wrote: »

Fitch and S&P are pure Bullsh1tters of the highest order and any report from them is not even fit to wipe your ass with.

Which ratings agencies do you consult when making your bond buying decisions?

... meanwhile, back in the real world, organisations who do actually buy bonds do actually listen to what Fitch and S&P have to say.

OMD

Phoebas wrote: »

Which ratings agencies do you consult when making your bond buying decisions?

... meanwhile, back in the real world, organisations who do actually buy bonds do actually listen to what Fitch and S&P have to say.

They do and they don't. When the ratings agencies were rating Irish debt as junk which essentially meant they were saying "do not buy" Irish rates were about 4%. 4% is not consistent with junk status so those actually putting money on the line did not listen to the ratings agencies. Irish rates are now less than USA & UK who both have better ratings than Ireland.

Phoebas

OMD wrote: »

They do and they don't. When the ratings agencies were rating Irish debt as junk which essentially meant they were saying "do not buy" Irish rates were about 4%. 4% is not consistent with junk status so those actually putting money on the line did not listen to the ratings agencies. Irish rates are now less than USA & UK who both have better ratings than Ireland.

Many buyers do listen to the ratings agencies regardless of the rates. Indeed some funds are restricted by their rules from buying bonds based on ratings from the ratings agencies.
As I said, its a small bit of good news.

antoobrien

Phoebas wrote: »

... meanwhile, back in the real world, organisations who do actually buy bonds do actually listen to what Fitch and S&P have to say.

Many buyers (pension funds, states etc) have policies that explicitly forbid them from holding bonds that are not investment rated by at least two of Fitch, Moodys and the S&P. Most of them require all three to be investment grade.

Sheldons Brain

Employment increases by 1.7% or 31,600 in the year to the second quarter of 2014, bringing total employment to 1,901,600.
Employment is a real benefit to people.

Dave!

http://www.independent.ie/business/irish/economy-set-to-grow-by-31pc-this-year-as-recovery-broadens-30532983.html

Economy set to grow by 3.1pc this year as recovery broadens

Ulster Bank has rowed in behind other predictions that Ireland's economy is on track to grow by over 3pc this year.

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Releasing its forecast this morning, Ulster Bank said it expects the country's gross domestic product (GDP) to rise by 3.1pc in 2014 as the recovery becomes "more broadly based".

It said that this year will mark the first since 2007 that exports, consumer spending, and investment will all be growing together.

The bank said that's an important sign that Ireland's economic recovery is looking "more sustainable".

Ulster Bank had previously predicted that Ireland's GDP would grow by 2pc this year.

Its revised prediction puts it on the same page as other forecasts released this month. It's also expecting the economy to grow by 3.2pc in 2015.

Davy Stockbrokers said earlier in August that it expects the country's economy to grow by 3.5pc this year, up from its previous forecast of 2.5pc. It also said that gross national product (GNP) would grow by 2.8pc this year and 2.3pc in 2015.

comongethappy

Now that the government changed the rules and started adding arbitrary values covering crime to inflate GDP, its hard to take them seriously.

fxotoole

comongethappy wrote: »

Now that the government changed the rules and started adding arbitrary values covering crime to inflate GDP, its hard to take them seriously.

But this particular prediction is from a private bank, not the government.

comongethappy

fxotoole wrote: »

But this particular prediction is from a private bank, not the government.

Who get their data from.......

I don't think any bank has the means to add up the value of all goods & services created in the economy.

They take a base prediction & go from there.

aliveandkicking

comongethappy wrote: »

Now that the government changed the rules and started adding arbitrary values covering crime to inflate GDP, its hard to take them seriously.

Its a European Union decision to include the black economy in GDP so you can't really blame our own Government for it.

Would you agree that the economy is in general improving from the position it was in say two or three years ago?

comongethappy

aliveandkicking wrote: »

Its a European Union decision to include the black economy in GDP so you can't really blame our own Government for it.

Would you agree that the economy is in general improving from the position it was in say two or three years ago?

Absolutely.

I just don't think the all of a sudden 3% rise based on arbitrary criminal activity is anything to get horny about.

Adding the untaxed black market to GDP just allows governments to bury deficit shortfalls easier.

Godge

comongethappy wrote: »

Absolutely.

I just don't think the all of a sudden 3% rise based on arbitrary criminal activity is anything to get horny about.

Adding the untaxed black market to GDP just allows governments to bury deficit shortfalls easier.

They are two different issues.

The 3.1% growth predicted by Ulster Bank is different to the 3% rise in GDP figures ascribed to the black economy.

In fact the 3.1% for this year is more impressive for the fact that it is coming off a higher base.

ardmacha

comongethappy wrote: »

Absolutely.

I just don't think the all of a sudden 3% rise based on arbitrary criminal activity is anything to get horny about.

Adding the untaxed black market to GDP just allows governments to bury deficit shortfalls easier.

It is hard to take this post seriously.

If employment is rising, as posted above, then so is GDP.
This growth is all the better as it is ahead of the Eurozone generally.

antoobrien

comongethappy wrote: »

I just don't think the all of a sudden 3% rise based on arbitrary criminal activity is anything to get horny about.

That's a lot of money on Bolivan Marching Powder, knocking shops & nixers to leave out.

ardmacha

antoobrien wrote: »

That's a lot of money on Bolivan Marching Powder, knocking shops & nixers to leave out.

You have to appreciate the the scale of this wasn't known to most people until Love/Hate.

comongethappy

ardmacha wrote: »

If employment is rising, as posted above, then so is GDP.

How much did the 30,000 or so extra jobs this year add to GDP?

Sand

The value of GDP is overemphasised. GDP is *not* wealth. It is income. GDP rapidly increased all through the years of 2003-2006. Looking back we can see that huge economic damage was done during those years, yet GDP was saying everything was rosy. This was the era when Bertie told anyone who voiced concerns to go and kill themselves.

The most important figure is the lower unemployment - though that 11.5% is celebrated as a 5 year low tells its own story about where we are.

PeadarCo

Sand wrote: »

The value of GDP is overemphasised. GDP is *not* wealth. It is income. GDP rapidly increased all through the years of 2003-2006. Looking back we can see that huge economic damage was done during those years, yet GDP was saying everything was rosy. This was the era when Bertie told anyone who voiced concerns to go and kill themselves.

The most important figure is the lower unemployment - though that 11.5% is celebrated as a 5 year low tells its own story about where we are.

The point should be that looking a one measure for economic performance is a bad idea. The same goes for the unemployment figure.

During the boom the low unemployment figure wasn't healthy given how much employment was tied up in the construction industry that was reliant on bad bank lending and government fiscal policies. Had the economy been ran properly between 2002-2007 unemployment would have probably been higher than it actually was.

Still employment levels are at their highest since 2009 and general indicators are looking up. The only worry would be how much of the 11.5% has turned into structural long term employment.

Sheldons Brain

Sand wrote: »

The value of GDP is overemphasised. GDP is *not* wealth. It is income.

GDP isn't even income for Irish people, it is production in Ireland, much of which is owned by shareholders outside Ireland. However, while GDP is not everything, some increase in production in Ireland is needed to provide demand for people's services.

carzony

loads of new jobs apparently

http://www.rte.ie/news/business/2014/0826/639439-employment-migration-cso/

Head The Wall

So it looks like net migration is around -150,000 jobs since 2009, it seems like the problem has just been exported. How would the figures look if people hadn't decided to take control their own lives

I'm a bit surprised by the 10% unemployment rate in Dublin, isn't that where all the work is supposed be now

carzony

wasn't it at 10% during the celtic tiger years also?

andrew

I don't understand why people emphasise in a negative way the role migration has played in reducing unemployment. Labour mobility is a fundamental pillar of the European project. No country will have enough work for all of its people all of the time. It's a very good thing that Irish people can and do move to where the jobs are, and the problem isn't 'exported' via migration, it's solved via migration. If someone moves from Mayo to Dublin, or Texas to New York, in search of work, then it's not an issue - what difference does it make that they now happen to be in a different country.

That said, brain drain is a bad thing, though I see few people referencing brain drain in particular when they speak negatively about emigration. In any case, it's not like people are leaving on famine ships any more, it's not very difficult to return home once things improve.

Also, here's an interesting bit of data about brain drain

Sand

andrew wrote: »

I don't understand why people emphasise in a negative way the role migration has played in reducing unemployment. Labour mobility is a fundamental pillar of the European project. No country will have enough work for all of its people all of the time.

But Ireland *consistently* fails to find enough work for all of its people, most of the time. Supply of labour exceeds demand, but wages stay amazingly high relative to other countries. There is a deliberate choice being made consistently - prioritise the insiders, feck the outsiders.

And emigration has been praised as a public good consistently too for decades.

“I cannot accept either the view that a high rate of emigration is necessarily a sign of national decline or that policy should be over anxiously framed to reduce it …… I believe there should be a more realistic appreciation of the advantages of emigration. High emigration, granted a population excess, releases social tensions which would otherwise explode and makes possible a stability of manners and customs which would otherwise be subject of radical change”.

Alexis Fitzgerald, Snr
His reservations to the 1956 report of the Commission on Emigration and Other Population Problems (page 222)
Irish Solicitor, founding partner of McCann Fitzgerald, son-in-law of Taoiseach John A. Costello, Economics lecturer of UCD, special advisor to Taoiseach Garret Fitzgerald 1981-82 and Fine Gael Senator 1969-81 (His nephew Alexis Fitzgerald, Jnr inherited the Senate seat).

“What we have now is a very literate emigrant, who thinks nothing nothing of coming to the United States and going back to Ireland and maybe on to Germany and back to Ireland. The world is now one world and they can always return to Ireland with the skills they have developed. We regard them as part of a global generation of Irish people. We shouldn’t be defeatist or pessimistic about it. We should be proud of it. After all, we can’t all live on a small island”

Brian Lenihan Snr
Comments to Newsweek, October 19th 1987
Fianna Fail TD and Minister. Member of the Lenihan political dynasty. His son Brian Lenihan Jnr did not emigrate, instead inheriting his fathers seat in 1995. His other son Connor, also did not emigrate, instead being elected TD in 1997.

"The type of people who have left, some of them find they want to enjoy themselves themselves and that's what young people are entitled to do.Moreover, they are coming with a different talent, they are coming with degrees, PhDs, they have a greater acumen academically and have found work in other parts of the world and that’s not a bad thing.”

Mary Coughlan
Comments to Irish Examiner 16 February 2010
Fianna Fail TD, Minister and Tanaiste. Daughter of a Fianna Fail TD.

From a certain aristocratic perspective perpetual emigration is a really good thing. For my own part I find it hard to see why a symptom of persistent economic failure is praised as a good thing.

andrew

Sand wrote: »

But Ireland *consistently* fails to find enough work for all of its people, most of the time. Supply of labour exceeds demand, but wages stay amazingly high relative to other countries. There is a deliberate choice being made consistently - prioritise the insiders, feck the outsiders.

And emigration has been praised as a public good consistently too for decades.

Don't get me wrong, in an ideal world Ireland would be able to find enough work for anyone who wants it most of the time. And I agree that people's propensity to emigrate means there's less of an imperative to solve the problems you outline above, which is bad (though I'd note that countries where people have much less of a propensity to emigrate have higher wage levels and more rigid labour markets, see the 'nuancing the picture' section of this speech for evidence of this). All I'm saying is that, some of these things, such as recessions, are genuinely completely out of our control and always will be. Given that, that people can and do emigrate is incredibly beneficial and a good thing. Looking for an unemployment rate 'net' of emigration, during a recession, as many people do, is to ignore this benefit and suggest that emigration is somehow an invalid way for people to respond to a high rate of unemployment.

Rightwing

andrew wrote: »

I don't understand why people emphasise in a negative way the role migration has played in reducing unemployment. Labour mobility is a fundamental pillar of the European project. No country will have enough work for all of its people all of the time. It's a very good thing that Irish people can and do move to where the jobs are, and the problem isn't 'exported' via migration, it's solved via migration. If someone moves from Mayo to Dublin, or Texas to New York, in search of work, then it's not an issue - what difference does it make that they now happen to be in a different country.

That said, brain drain is a bad thing, though I see few people referencing brain drain in particular when they speak negatively about emigration. In any case, it's not like people are leaving on famine ships any more, it's not very difficult to return home once things improve.

Also, here's an interesting bit of data about brain drain

I'd say it's not so much the rate, but more to do with forcing down labour costs.

Head The Wall

Here's some good economic news for whatever people had their snouts stick in this particular trough

http://www.irishtimes.com/news/ireland/irish-news/temple-bar-2-7m-rain-canopy-completed-at-30-over-budget-1.1910049

And we're always told by PS staff on here that there is a rigorous tendering process in place and that nepotism is a thing of the past.

Yeah right, how do ye explain this

andrew

Head The Wall wrote: »

Here's some good economic news for whatever people had their snouts stick in this particular trough

http://www.irishtimes.com/news/ireland/irish-news/temple-bar-2-7m-rain-canopy-completed-at-30-over-budget-1.1910049

And we're always told by PS staff on here that there is a rigorous tendering process in place and that nepotism is a thing of the past.

Yeah right, how do ye explain this

On the plus side, at least the City Council's internal audit function is doing its job well

K-9

Head The Wall wrote: »

Here's some good economic news for whatever people had their snouts stick in this particular trough

http://www.irishtimes.com/news/ireland/irish-news/temple-bar-2-7m-rain-canopy-completed-at-30-over-budget-1.1910049

And we're always told by PS staff on here that there is a rigorous tendering process in place and that nepotism is a thing of the past.

Yeah right, how do ye explain this

Mod:

The Charter wrote:

Thread derailing will be treated particularly harshly. If there's more than a couple of examples of a poster taking an unrelated thread and turning it into a public-versus-private / unionists-versus-nationalists / us-versus-them contest, then expect a sanction.

This is a thread for more macro economic news and discussion, please keep on topic.

Head The Wall

andrew wrote: »

Don't get me wrong, in an ideal world Ireland would be able to find enough work for anyone who wants it most of the time. And I agree that people's propensity to emigrate means there's less of an imperative to solve the problems you outline above, which is bad (though I'd note that countries where people have much less of a propensity to emigrate have higher wage levels and more rigid labour markets, see the 'nuancing the picture' section of this speech for evidence of this). All I'm saying is that, some of these things, such as recessions, are genuinely completely out of our control and always will be. Given that, that people can and do emigrate is incredibly beneficial and a good thing. Looking for an unemployment rate 'net' of emigration, during a recession, as many people do, is to ignore this benefit and suggest that emigration is somehow an invalid way for people to respond to a high rate of unemployment.

So based on last years figures we can see that it is mainly working people that have left as only a sixth were unemployed and the rest were mainly graduates. Some may say that they left jobs that someone else would have taken up but that's just job replacement and to me is not really dealing with the job creation problem. I'm sure the drop will massage some govt %'s and that's what they care about

And I say this as someone that left a job to move in 2011, I didn't have to move and I wasn't forced to for financial or other reasons. I choose to do it and I don't think it's ideal for any country to have people in my situation leaving but if the system is going against you what are you to do.

Only 12,300, or one in six, of the 81,900 people who emigrated was unemployed and the rest comprised 28,900 who quit jobs to move abroad and the 29,000 who were students immediately prior to their departure.

The number of new graduates leaving was higher than at any time in the previous six years, and almost half (47%) of everyone who left had a third-level education.

Net emigration by Irish nationals at 124,000 in 2009-2014

Godge

Head The Wall wrote: »

So based on last years figures we can see that it is mainly working people that have left as only a sixth were unemployed and the rest were mainly graduates. Some may say that they left jobs that someone else would have taken up but that's just job replacement and to me is not really dealing with the job creation problem. I'm sure the drop will massage some govt %'s and that's what they care about

And I say this as someone that left a job to move in 2011, I didn't have to move and I wasn't forced to for financial or other reasons. I choose to do it and I don't think it's ideal for any country to have people in my situation leaving but if the system is going against you what are you to do.

It is not necessarily true that it is bad for a country to have people leaving.

http://www.alpbach.org/alpbuzz/where-the-european-brains-move/

The tables in the attached make interesting reading. They suggest that in terms of net migration, Ireland benefitted from a "brain gain" rather than a "brain drain".

If we are losing low-paid uneducated people to other countries and instead are taking in high-earning, high-tax paying workers, educated at another country's expense to fill our skills needs, then as a country we are doing well.

Godge

http://www.rte.ie/news/2014/0902/640989-budget-will-be-significantly-less-than-2-1bn/


Good news on the budget.

Rightwing

Godge wrote: »

http://www.rte.ie/news/2014/0902/640989-budget-will-be-significantly-less-than-2-1bn/


Good news on the budget.

Good news, but we're still borrowing €800m a month. Now we surely can't be blaming this on the bankers. Hope the Govt are strong enough to tackle spending. A lot of waste still there.

AlmightyCushion

Godge wrote: »

http://www.rte.ie/news/2014/0902/640989-budget-will-be-significantly-less-than-2-1bn/


Good news on the budget.

I see it as a negative actually. The budget deficit is still pretty massive and we're going to have to cut it sooner or later. By doing it sooner, we add less to the national debt and thus reduce the amount of interest payable each year.

Kermit.de.frog

Also real danger government is raising expectations and the usual suspects will be in looking for pieces of a non existent pie.

Gumbo

Kermit.de.frog wrote: »

Also real danger government is raising expectations and the usual suspects will be in looking for pieces of a non existent pie.

Bankers looking to loan out more and earn more bonus I assume?

Sheldons Brain

The budget deficit is still pretty massive and we're going to have to cut it sooner or later. By doing it sooner, we add less to the national debt and thus reduce the amount of interest payable each year.

With a measure of growth around, the deficit will improve anyway.

Kermit.de.frog wrote: »

Also real danger government is raising expectations and the usual suspects will be in looking for pieces of a non existent pie.

This is fair comment, they have not proposed any plan for more than a couple of months ahead. Is the Irish political system capable of doing this?

ardmacha

David McWilliams has called it
http://www.independent.ie/opinion/columnists/david-mcwilliams/something-major-is-stirring-in-the-irish-economy-the-place-looks-set-to-take-off-30557058.html

is 2014 the new 1994? What have we learned?