Transcript Emerging from the Boom

The Positive Economist
Susan Hayes
PDST Economics Conference
Emerging from the
Boom!
2nd Oct 2010
Emerging from the Boom!
Charlie McCreevy
A Leader Leading the
Masses
Economic Output
• Economic output from 1993 to 2000, the average growth
of real GNP was 8.3 per cent per year;
• Debt/GDP ratio was at 29 per cent in 2005
• In 2007, there were 33,000 Irish millionaires
• 50% more in women in the workforce than in 1997
Employment
 Employment: total employment rose by 605,500 in the period
1987 to 2001, an increase of over 54 per cent in 14 years
 Multinationals accounted for just 10% in 2000
 Unemployment saw a trough at 4.5% by the end of 2007
Celtic Tiger
Irish People Queuing to
Buy Houses
“The Dublin housing crisis could probably be
ended tomorrow if you replaced every single
person in Dublin with someone else from
another part of the world.”
Anthony Sweeney, 1999, European Financial
Markets Expert
“Everything in the world may be endured, except
continued prosperity”
Johann Wolfgang von Goethe
Unequal Society
Unequal Society
In 2006, the richest 20% of the working-age population
were earning 12 times as much as the poorest 20 % –
one of the highest levels of income inequality among
any of the 30 OECD countries.
The UN Poverty Index
The UN Poverty Index in 2002 rated Ireland as having
the highest percentage of poor people in Western
Europe, about 15.3 percent of the country's 3.9
million residents
Dancing on the edge?
What underpinned Ireland’s
economic growth
• Low corporate taxes
• EU membership and the European internal market;
• Competitiveness;
• Foreign direct investment (FDI); and
• Education and labour supply.
• A time of strong global expansion.
Competitiveness
– Jan 2010:
CPI Base 2006 Rate = 100
– August 2010:
Goods Base 2001 Rate = 103.4
– Clothing & Footwear (-8.2%)
– Food & Non-Alcoholic Beverages (-3.2%)
– Household Equipment & Routine Household Maintenance
(-4.0%)
Foreign Direct Investment
– OtterBox Announces Plans for EMEA HQ in Cork
(No. 62)
– Intel Corporation announced a 3 year, $1.5million deal
Tyndall National Institute, UCC
– Fi-Tek is establishing its European Headquarters in
Dublin.
– AOL Global Operations Limited that it is to further
expand its Dublin operation
– Google is to create 200 new jobs in a new Operations
Centre in Dublin.
Employment & The Labour Supply
• Monthly decrease of 5,400 in the Live Register in
September 2010.
• Decrease in 2,600 males and 2,900 females
• Rate of Unemployment is at 13.7%, down from
13.8% in August.
• 91,000 unemployed graduates
Emigration
• Emigration:April 2009/10:
65,300
• Immigration: April 2009/10:
30,800
• Net Outward migration from 7,800 in April 2009 to 34,500 in
April 2010.
• Highest level of net outward migration since 1989.
Migration
A time of strong global
expansion
– ESRI suggest that an increase in world output of 1 per cent
in the long run increases the demand for Irish output by
around 1.3 per cent
Sure isn’t the world teetering on a
double dip?
• Singapore's its $182 billion economy has already grown
15% this year.
• Thailand’s (GDP) may expand 7.3% to 7.8% in 2010
• Turkey's economy grew 10.3% year-over-year in the second
quarter
• In Brazil, nearly two million new jobs were created in the
first eight months of this year.
– 3 x the number of jobs created in the United States,
– which has 120 million more residents
– an economy that's five-times larger than that of Brazil
Exports – Our Shining Light!
• Exports: €67 billion in 2009 and growing exponentially
• WTO: Ireland ranks the 9th largest commercial
services exporting nation
• In Ireland it is estimated that only 3.5% of services
businesses do any exporting, which employ only an
estimated 12% of the 843, 000 people employed in
the private sector services.
What don’t I want any more?
• Ridiculous Quangos
• Cosy Cartel on Boards
• Inefficiencies at State Level
On Thursday 21st Sept 2010., Ireland's Central Statistics
Office said gross domestic product, a broad measure
of the value of goods and services produced by the
economy, dropped 1.2% from the first three months
of the year. Economists had forecast a 0.5% growth
rate, which would have extended a brief expansion of
the Irish economy that began in the first quarter.
The Problem of
Averages
Three Ways to Measure
GDP
• Final Goods Produced
• Value Added
• Income
Breakdown on last
quarter’s contraction
• Private consumption fell by 0.2% in the quarter.
• Public consumption contracted by 0.8% in the
quarter.
• Imports grew by 4.5 per cent quarter on quarter
• Fixed capital formation rebounded
• All old news anyway!
Have we money to
spend?
• 55,000,000 contributed from Volvo Ocean Race
• 34,000,000 contributed from Oxegen
• 30,000,000 contributed from the Cavan Fleadh Ceoil
• 10,000,000 to the local economy from the National
Ploughing Championships
• Car scrappage scheme: sales of new cars up by 94%
on this month last year!
Why Did I…..
Why did I set up a business in a recession, as opposed to
the top of the boom?
www.thepositiveeconomist.com
www.optionstradingireland.com
www.investinginyouth.com
Thank you.....
See you throughout the day!
Thank You........
Susan Hayes