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BUSINESS GROUP IBEC has forecasted the Irish economy to grow 4.2% this year, and says the country has now moved past its “recovery” phase.
Despite the uncertainty caused by Brexit, “the fundamentals of the Irish economy are very solid” according to Ibec.
One cause of concern, however, is the cost of renting in Ireland which it says is “damaging competitiveness”. Failure to solve the housing crisis will mean that prices on other goods will increase in the future, it says.
Ibec’s head of tax and fiscal policy Gerard Brady says: “Since the crisis we have seen a recovery in the Irish economy which has been exceptional.
This was driven by the strength of the Irish business model with record FDI and an increasingly global footprint from our indigenous industries. Because of this growth in our business substance, the economic recovery phase is now over, with 2017 seeing Ireland surpass many of the most important pre-crisis milestones.
It even predicts that we could reach full employment before the end of 2018, although it is “notable that the number of Irish persons returning from abroad has not grown significantly since the economic turnaround”.
In terms of comparison with our EU counterparts, Ireland is performing well in terms of earnings growth and household income, but also considerably higher in the cost of rent.
“In 2017, Irish rents grew at over six times the median of the other EU15 countries,” Ibec says.
Brady says that the fundamentals underpinning the economy are a lot stronger than the previous period of economic growth:
This phase is now more sustainable than the ‘boom’ period.
He did add, however, that the main question facing the economy in the next few years is how it meets the needs of a growing population, with major challenges apparent in the housing sector.
If the government was to deliver the 26,000 houses by 2020 which was a target of the Rebuilding Ireland plan, we will need an extra 50,000 construction workers, according to Brady.
He adds: “Delivering on the promise of growth with stretched capacity and a tight labour market, whilst also maintaining competitiveness, will be a key challenge ahead for both business and the government.”
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Rents gone through the roof
House prices soaring
Cars being bought left right and centre
No boom here
@John O Neill: The economy of Ireland is fundamentally sound. Look at how well it recovered compared to Spain, Italy, Greece and Portugal. Our recession was caused by over borrowing and then the rug being pulled away when the global economy collapsed. When some people ran out of funds it started a domino effect. If Ireland would have had enough of a buffer financially then our recession would have been just a short dip. As long as we keep a lid on borrowing this time then it won’t be like the last time.
@Mary Murphy: how do builders get the funds to construct these new homes? Borrow. How do people get the money for a new home and new car? Borrow. How do banks make money? Lend.. there’s going to be a credit bubble soon enough if we’re not there already
@Ciaran Whyte: in the boom did you ever hear anyone saying they cannot get a mortgage? That is the difference this time the banks are much tighter on lending. Additionally the banks are not funding themselves by borrowing short term from other banks and financial institutions.
@Mary Murphy: that is horse manure banks are lending, some stat before Christmas about mortgage approvals are through the roof, there is a massive housing shortage btw , boom time we were building 90000 units per annum we aren’t even close to 20000 this year , PCP deals loans expensive mortgages are all pointing to if there is a dip in the world economy this Country will be hit again very hard as we are a global economy
@Ger Kelly: please show me ‘some stat’. Now look at really why the banks got in trouble….because they ran out of funding. Take BoI for example….they had bad debts but would have been able to see out the dip if they had funding. They were effectively bought by some investors who saw that the bank had a liquidity problem…not a fundamental issue. Why do you think ‘vulture’ funds buy loan books….because banks need cash now. The bottom line in any business is cash is king…This time our banks are funded more solidly. So before you roll out some stat take some time to learn how it all fits together and you will see that lending is not the problem it is how the lending is funded
According to the FFG’ers who regularly post in here we don’t have a homeless crisis like the one mentioned by IBEC in this item. Homelessness is the homeless person’s fault.
@Mary Murphy: There were warning signs that economy was overheating ,etc &warnings from eg Morgan Kelly,Philip Ingram, Johnathan Sugarman but these were ignored.That mustn’t happen again.
I note in OECD -Ireland-Economic forecast (Nov’17) that there are some warnings including “The sharp rise in prices and lending raises concerns that another property bubble may be forming .”It’s also mentions uncertainty re final outcome of Brexit& the high levels of private sector debt re some Households & Corporations.
When one considers that an estimated €39B worth of goods and services were traded between UK&Ireland in 2016 supported more than 700,000 jobs,Brexit is indeed worrying!
@Mary Murphy: Has the 210,00,0000,000 Euro National debt and the 10,000,000,000 Euro pa interest payment being written off? How did i miss that and i read the establishment press every day. The next crash which will start in the US in 2018 will cause a Worldwide recession that will make the 2008 crash look like a walk in the park. The debt levels by Governments companies, and personnel debt in economies is unsustainable without zero interest rates and printing money out of thin air with no tangible assets to back it only junk bonds. The major Central banks have run out of road, they have to raise interest rates and stop printing useless fiat money, and when that happens the shit will truly hit the proverbial fan. I hope my analysis is wrong and the same honchos and economists that said we would have a soft landing in 2008, get it right this time. Time will tell
• 19 – The number of TD’s that bothered to turn up in December 2017 for a Dail session dedicated to the issue on homelessness.
• 59% – The rate homeless soared in Enda Kenny’s final year of office. 100% – the reported rate in one year that homeless has later subsequently soared.
• 60% – The percentage of people previously assessed under Enda Kenny’s rule that needed to borrow money, to pay their household bills. 20% borrowed money from family/friends to pay bills.
• Ireland has the third highest debt per capita in the world after taking on 42% of EU debt.
• 8,857 homeless – including 3,333 children (Jan’ 2018) staying in state-funded emergency accommodation in Ireland in November, the highest number in decades.
• 689,000 people on public hospital waiting lists (Jan’ 2018)
• 1,895: the number of children between the ages of five and 17 waiting over a year for a psychology appointment in Ireland.
• 82,459: The number of people admitted for care who were on trolleys in A&E departments or wards from January to June of 2017.
• 3,800: The number of carers under the age of 15 in Ireland, according to Census 2016.
• 141 repossessions of homes taking place per month.
• 2 Families becoming homeless in Ireland, per day.
• 120,000 people on local housing authority lists. People waiting on these lists as long at ten years and more.
.
Aye, so many have it better. The Fine Gael/Fianna Fail/Labour Party trickle down has worked. We can all live the dream.
@Unitedpeople: you omitted to list the good stuff such as there is now a job out there for people who want to work.
15% unemployment rate down to 6% in 6 years. Exceptional little country.
@James Gorman: …If you 100% trust the figures FG is spouting. It would be very foolish to do that. Leo himself is not good with number accuracy as we have recently seen.
@Unitedpeople:
It doesn’t take a statistician to see that there is effectively a job out there for anyone who wants to work. One of the worst aspects of the recession was the unavailability of work for people that were more than willing and able. Thankfully that is no longer the case
@Tweety McTweeter: Minimum wages in some cases. Unaffordable for a lot in many cases.
@Unitedpeople: you quote census figures in yours… the census also clearly shows employment/unemployment figures
@Tweety McTweeter: To quote some that posts to our own Facebook pages “In Ireland there is a considerable gap between the richest and poorest – the top 20% of the population earn almost five times as much as the bottom 20%. So (IBEC) ‘averages’ mean little in reality.”
@Ciaran Whyte: Look deeper into how the unemployment number have been FG massaged through reclassifications.
@Unitedpeople:
It’s a sad state of affairs if people are opting to remain on social welfare rather than take up available employment, even if it is minimum wage. Getting back into work would at least make them more employable in the longer term and be much better for themeselves as well as their country.
Do you think a reduction in social welfare is necessary or would you advocate an increase I minimum wage?
@Unitedpeople:
Ireland ranks 11th highest in the world for social progress
https://en.m.wikipedia.org/wiki/Social_Progress_Index
One could only assume that this includes equality in income levels and progressive taxation. I don’t think it is fair to state that we have an unequal society
@Unitedpeople: FG in charge of the CSO now???
@James Gorman: In April 2016 the official unemployment rate was 6.5%. Yet on the census form for the same month that year 12.6% of people declared themselves unemployed. Someone is telling lies…
@Unitedpeople: You cannot trust FG with any figures they quote, they have given false figures on hospital waiting lists, on the number of houses they built in recent years and many other figures quoted,
@Tweety McTweeter: Yes tweety thousands of jobs that will pay 9.50 p.h. which is 2e p.h. below the living wage. Until this issue is addressed the problem will remain.
@Tweety McTweeter: You are aware that Wikipedia is one of the most unreliable reference sources on the web? Anyone can go in and edit anything on the site. It is banned as a source of reference in most if not all Universities/colleges.
@Unitedpeople: You realise that the CSO uses the International Labour Office of the UN’s definition of unemployment to say we have 6% rate?
So it’s not Leo spouting.
@Ciaran O’Mara:
1)CSO also defines employment as having worked an hour or more the previous week.
2)Those on activation schemes are excluded from unemployment figures which SJI Employment Monitor May 2017 it at 80,000+.
That Employment Monitor also stated that there are 92,000 part time workers who would take full employment if they could find it&13% of the part time workers were in receipt of (reduced) Jobseekers allowance which is more than double the rate from 10years ago.
3)21% of individuals in Ireland living in Very Low Work Intensity Households compared to EU average of 11%
@Tweety McTweeter: “Deprivation in the Unequal Recovery” by Dr Rory Aherne
@Unitedpeople: I note that ECB is to gradually halve bond buying because of plans to scale back quantitative easing from 60B a month to 30B a month ,Draghi announced on 26/10/17.
Salaries must have gone up in a big way, because I can’t fathom how some one could pay 250-300k for a grey house in a grey Irish town. Also add insane car insurance, road tax etc. Plus healthcare, bank charges etc etc.
@Bairéid Rísteard: completely agree with you .from what i see a huge amount of wealth is being removed from older generations to fuel this .
@Fred Croydon: About??? Can you provide a reputable link to back up that claim?
I have a brother-in-law who emigrated to the south of England 2 years ago doing what he had been doing in Ireland but making more money. His family are settling in nicely, his wife and he were able to secure finance on new cars despite being blacklisted by credit agencies here in Ireland. Groceries are cheaper, in fact everything is cheaper.
Like a circle in a circle like a wheel within a wheel ,I wonder if this recovery is really really (real)
@FlopFlipU: “Ireland has only recovered by 41% from the recession”10/11/17 journal.ie
Why would emigrants return? Dublin rent is more than the likes of Sydney and Melbourne now with wages at least 25% less.
@The Guru: Their’s 31 other County’s btw
@Seamus Balfe: 25.
@The Guru: I came back, takes 2 years to reabsorb to the Irish ‘way’. That of no transport, no plan (we seem to just ride whatever wave were on). Shelling out for all types of insurance (it must be a massive employer here) and paying way over the odds for everyday items (box of painkillers in London 60p here €5)… but once you get over that it’s not too bad, weather’s sh!t but, ‘sher what can you do?’ *shrugs*
A lot of citizens have not had an income rise in years – but the government has had plenty, even another €3,500 at the start of this month.
#actualreality
@Unitedpeople:
Most people work in the public sector, how would the government instigate change in wages there? Or are you just talking about public sector and social welfare recipients?
@Tweety McTweeter: most people work in the public sector?…..
Familiar rhetoric brrrrrr
@Rodger 5: General election coming in 2018. FG has already attempted twice in the last month, to sweeten up a traditional major support base – the farming community.
The PR will continue. The Fine Gael newsletter (Irish Independent) will:
(a) feature positive FG PR more
(b) see other specific parties attacked more so, on its front pages with even more increased regularity.
(c) feature more stories to try induce a feel good factor.
I don’t know if this is true or not, but I hope so, after austerity we need some prosperity.
Hopefully people are putting something away for a rainy day this time.
The high cost of rental is damaging far more than COMPETITIVENESS!!!! It’s destroying ordinary lives, people’s dignity, people’s emotional wellbeing and people’s confidence in a country that is supposed to facilitate basic needs, particularly when hard earned tax money is taken!!!!
@Geralyn Early: The last Daft.ie Report showed that many rents twice to three times the costs of mortgages on similar properties.I think banks should take people’s history of paying rents in account re trying to buy a house!
Prey tell us. Other than gloating about the cooked state finance figures, where is this great economic recovery?
@Adrian: Nowhere in reality.
one way or another it makes no differance
Now if they could just find a way to lower the rent and housing costs to less than astronomical prices, that’d be great…
Why can’t third world and chaotic Middle Eastern countries not copy Ireland’s economic model instead of failed Communist and Dictatorial models.
@Tom Molloy: they don’t have as many brown envelopes being passed around as we do?
@Tom Molloy: They are trying. Maybe that’s why a few of them are paying Bertie Ahearn €30,000+ every time he goes to them, espousing how he saved Ireland, creating the Celtic Tiger.
@Tom Molloy: __ Those places would do a lot better were the big players on the planet to stop interfering in how they run those countries.
@Ted Murray: America: “Let’s bring democracy to everyone as it’s the ideal system of government!”
Also America: *elects Donald Trump*
Huge public spending bill, mainly due to high public sector pay. It is ok now as we receive massive amounts of corporate tax from foreign companies as we are a tax haven. The American economy is booming at the moment but when it experiences difficulty we will be screwed again. I cant see much being done to make the Irish economy more resilient. Also, if EU countries succeed in getting corporates to pay tax in countries where it is earned we will be in real trouble.
Nothing exceptional happening here!
Soft landing again I’d say.
If IBEC so confident re recovery,I presume we’ll hear of more employees getting paid “a living wage” of €11+ an hour like Lidl&Aldi announced for entry level workers starting from Feb-Mar this year!
Let me guess, when the bust happens we should prepare for a ‘soft landing’?
#suckers
What boom ?
Until people stop paying these ridiculous prices to buy hoses and pay rents don’t see anything changing.
It’s a great country…
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