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Dublin - Metrolink (Swords to Charlemont only)
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I don't agree because unlike previous economic downturns this one has a few key differences:
-The people laid off from their jobs are mostly people who work in Restaurants, pubs, retail, hotels etc. i.e. the low paid, who themselves pay very little tax on their incomes (most of them pay nothing at all in income tax). The office based employees, who are better paid (paying the bulk of income tax and are the majority of the work force), are working from home. The people working from home + tourists are the customers for the above workers. I think you'll see the lower paid sectors bounce back real fast once the stay at home workers start spending again. In fact after all this time locked up, there may well be a boom in such spending.
-There is no banking crisis
-There is no fixed assets that have crashed in value (like property)
All fair points and would agree that the low paid are going to be the hardest hit here, however-
-When restaurants return its going to be at a reduced capacity because of social distancing, probably 50% meaning half of all jobs will not return for some time. Even then people with underlying conditions and/or general nervousness will avoid them until there is a vaccine. A single news report of an outbreak and/or deaths from a hotel/restaurant has the potential to scare the bejayus out of everyone and then confidence in the sector collapses
-Tourism from overseas will be very slow to return, again many will want a vaccine before they consider foreign travel.
- 20-22% unemployment is projected, even if the majority are low paid the effects of that still ripple through the economy and upwards.Consumer confidence drops and people dont spend when they are not feeling 100% secure in their jobs. Just look at Aer Lingus this morning planning 900 job cuts or 20% of their workforce. The other 80% still have a job but they're not going to be confident enough in it to spend on big ticket items. That sofa purchase for 3 grand is off the table then you've the ripple effects of job losses elsewhere when people dont spend.
-On property not a crash to the extent of what we saw in 2008 but also there is a correlation between property prices and unemployment, they loosely track each other. Its hard to see how 20% unemployment and a global recession will not effect property prices. Investors are spooked because there is too many unknowns and market uncertainty. Banks are already pulling mortgage approval from anyone who is on the Covid 350 a week payment and wont be granting it for new applications
The other thing that I think is going to effect Metrolink is the very notion of work from home. After years of management push back now the genie is out of the bottle and many employees are going to demand WFH when it is possible. For some that might mean 4 days at home and 1 in the office, for others it might be 1 at home and 4 in the office and then people in between that too.
Regardless of what way the cookie crumbles many more people are going to be WFH when all this is done. Im already hearing anecdotally from friends working in the IFSC that WFH is now so important to them that if it is not allowed post-Covid they will move job to an employer who does allow it. Lots of people waking up to the fact that their 3 hour daily commute is not 100% necessary and they want that extra hour in bed and extra hour of playtime with the kids at home in the evenings rather than being stuck in a daily traffic jam. If employers continue on the charade that they have to be in the office 5 days a week then good employees will vote with their feet.
That all then has knock on effects for the Metrolink. I think even at a conservative estimate we are going to see traffic volumes drop by at least 20% and perhaps more. Between 800,000 unemployed and massive demand from those still with jobs to WFH the M50 is not going to be doing the 150,000 tolled trips per day, city centre streets are going to have much reduced traffic and journey times. That then feeds into the political class who'll say we don't need a Metro because traffic volumes are way down and many people are WFH. It gives them the excuse not to build it (wrong I know but this is politicians we're dealing with here).
As Grandeeod said we're spending 4 billion in the 12 weeks alone just for wage supports such is the sheer scale of this, basically the price of the entire Metrolink blown in the space of 3 months just to keep peoples heads above water. And there is even more on the way, the Central Bank is estimating we need to borrow between 20 and 30bn to get over this. I just cant see it being politically palatable to be going spending 4 or 5 billion of that on the Metrolink at a time when traffic volumes are down and unemployment is so high. When it comes down to choices like cutting services, cutting the social welfare and pensions or spending 4-5bn on a Metrolink ultimately any political party will choose the path of least resistance. Pensions and social welfare are sacrosanct, underground Metros are not. Theres no votes to be won from a Metro but thousands to be lost from cutting social supports.
For sure we can borrow 20-30bn at cheap rates, thats fine but what it gets spent on is a whole different ball game. IMO it would take a very ballsy politician to try to push a Metrolink through for at least the next two or three years and perhaps even longer. We dont have ballsy politicians, they only look to the next election. Its hard enough to get a project of this scale underway when times are (were) good, that difficulty increases substantially when times are bad.
I want to see it go ahead and am full square behind the idea of fiscal stimulus to create thousands of construction jobs during its delivery. But think that this recession that is only now getting underway will result in a number of factors that will mean no political party will sign a cheque for it till at least 2023/4. I think 2030 would be the very earliest it could be delivered which is basically another decade away
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The idea that massive infrastructure can create economic growth has been debunked so many times. The economic growth created is only via the enhanced livability of the Dublin area from the train and that is very substanial.All fair points and would agree that the low paid are going to be the hardest hit here, however-
-When restaurants return its going to be at a reduced capacity because of social distancing, probably 50% meaning half of all jobs will not return for some time. Even then people with underlying conditions and/or general nervousness will avoid them until there is a vaccine. A single news report of an outbreak and/or deaths from a hotel/restaurant has the potential to scare the bejayus out of everyone and then confidence in the sector collapses
-Tourism from overseas will be very slow to return, again many will want a vaccine before they consider foreign travel.
- 20-22% unemployment is projected, even if the majority are low paid the effects of that still ripple through the economy and upwards.Consumer confidence drops and people dont spend when they are not feeling 100% secure in their jobs. Just look at Aer Lingus this morning planning 900 job cuts or 20% of their workforce. The other 80% still have a job but they're not going to be confident enough in it to spend on big ticket items. That sofa purchase for 3 grand is off the table then you've the ripple effects of job losses elsewhere when people dont spend.
-On property not a crash to the extent of what we saw in 2008 but also there is a correlation between property prices and unemployment, they loosely track each other. Its hard to see how 20% unemployment and a global recession will not effect property prices. Investors are spooked because there is too many unknowns and market uncertainty. Banks are already pulling mortgage approval from anyone who is on the Covid 350 a week payment and wont be granting it for new applications
The other thing that I think is going to effect Metrolink is the very notion of work from home. After years of management push back now the genie is out of the bottle and many employees are going to demand WFH when it is possible. For some that might mean 4 days at home and 1 in the office, for others it might be 1 at home and 4 in the office and then people in between that too.
Regardless of what way the cookie crumbles many more people are going to be WFH when all this is done. Im already hearing anecdotally from friends working in the IFSC that WFH is now so important to them that if it is not allowed post-Covid they will move job to an employer who does allow it. Lots of people waking up to the fact that their 3 hour daily commute is not 100% necessary and they want that extra hour in bed and extra hour of playtime with the kids at home in the evenings rather than being stuck in a daily traffic jam. If employers continue on the charade that they have to be in the office 5 days a week then good employees will vote with their feet.
That all then has knock on effects for the Metrolink. I think even at a conservative estimate we are going to see traffic volumes drop by at least 20% and perhaps more. Between 800,000 unemployed and massive demand from those still with jobs to WFH the M50 is not going to be doing the 150,000 tolled trips per day, city centre streets are going to have much reduced traffic and journey times. That then feeds into the political class who'll say we don't need a Metro because traffic volumes are way down and many people are WFH. It gives them the excuse not to build it (wrong I know but this is politicians we're dealing with here).
As Grandeeod said we're spending 4 billion in the 12 weeks alone just for wage supports such is the sheer scale of this, basically the price of the entire Metrolink blown in the space of 3 months just to keep peoples heads above water. And there is even more on the way, the Central Bank is estimating we need to borrow between 20 and 30bn to get over this. I just cant see it being politically palatable to be going spending 4 or 5 billion of that on the Metrolink at a time when traffic volumes are down and unemployment is so high. When it comes down to choices like cutting services, cutting the social welfare and pensions or spending 4-5bn on a Metrolink ultimately any political party will choose the path of least resistance. Pensions and social welfare are sacrosanct, underground Metros are not. Theres no votes to be won from a Metro but thousands to be lost from cutting social supports.
For sure we can borrow 20-30bn at cheap rates, thats fine but what it gets spent on is a whole different ball game. IMO it would take a very ballsy politician to try to push a Metrolink through for at least the next two or three years and perhaps even longer. We dont have ballsy politicians, they only look to the next election. Its hard enough to get a project of this scale underway when times are (were) good, that difficulty increases substantially when times are bad.
I want to see it go ahead and am full square behind the idea of fiscal stimulus to create thousands of construction jobs during its delivery. But think that this recession that is only now getting underway will result in a number of factors that will mean no political party will sign a cheque for it till at least 2023/4. I think 2030 would be the very earliest it could be delivered which is basically another decade away0 -
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