Ireland technically out of recession

[Riddickcule]

GDP grew slightly during the third quarter but the Central Statistics Office (CSO) has urged caution on calling an end to recession
The latest Quarterly National Accounts, which were published this morning, indicate that on a seasonally adjusted basis there was a 0.3 per cent increase in Gross Domestic Product (GDP) from July through to September.
On an annual basis, GDP fell by 7.4 per cent in the year to the end of October, compared to a 7.9 per cent decline in the preceding quarter.
Technically, given that the definition of recession is two quarters in a row of falling GDP, this means that Ireland has now exited recession.
However, at a press conference earlier today, assistant director general of the CSO Bill Keating refused to call an end to the recession, pointing out that much of the rise in GDP was attributed to profits from multinationals based in Ireland.
Whether Ireland was out of recession or not was " a matter of semantics", Mr Keating said.
"The general picture shows that on a seasonally adjusted basis there is a levelling off in GDP but GNP continues to decline, albeit at a slower pace than it has in previous quarters. Contributing to the GDP increase in a fairly major way was growth in the multinational sector," he added.
Analysts also warned against declaring the end of what has been one of the worse recessions ever experienced in Ireland.
GDP is the international method of calculating economic decline but in Ireland's case, the Economic and Social Research Institute (ESRI) and other local bodies prefer to focus on GNP (Gross National Product) a measure which strips out multinational profits, much of which usually leave the country.
According to CSO, profits declared here by foreign-owned enterprises increased by €1,054 million during the year ending October 31st 2009.
During the third quarter Gross National Product (GNP) showed a decline of 1.4 per cent on a seasonally adjusted basis. In the year to the end of October 2009, GNP was 11.3 per cent lower.
A breakdown of the latest CSO figures show that consumer spending was 7.3 per cent lower in the third quarter of 2009, compared to the same three-month period a year earlier.

Captial investment declined by 35 per cent on an annual basis while net exports were 2,813 million higher than a year earlier.

Over the year the volume of output of industry decreased by 9.6 per cent. Within this the output of the construction sector fell by 34.4 per cent.

Output of distribution, transport and communications was down 9 per cent on an annual basis, while output of other services was 3.4 per cent lower, the figures show.
Alan McQuaid, economist at stockbroking firm Bloxham said given that international commentators put so much emphasis on quarterly changes in GDP, we shouldn't downplay the third quarter increase. He said we should take some consolation that on this basis, Ireland came out of recession ahead of the UK.

"Overall, we continue to believe that the Irish economy is making progress and is heading in the right direction," said Mr McQuaid. "While GDP is set to contract by around 7.5 per cent in real terms in 2009, we still think the average fall in national output could be less than 1 per cent next year."
Commenting on the quarterly figures, Ibec senior economist Fergal O'Brien said the latest data shows the economy is beginning to stabilise.

"In terms of the pace of contraction in the Irish economy, the worst is now clearly behind us. Most sectors of activity are showing signs of stabilisation, with the exception of the construction sector, which continued to lurch downwards in the third quarter," he said.
"Today’s numbers do not change our view that GDP will fall by about 7.5 per cent this year and will drop on an annual basis again in 2010. We can now see some light at the end of the tunnel, however, and the economy should begin to grow again around the middle of next year.
KBC's chief economist Austin Hughes also rejected the idea the recession was over saying the quarterly GDP increase does not reflect the reality of the drop in incomes and employment experienced in Ireland over the past year.








http://www.irishtimes.com/newspaper/...breaking35.htm

[Fr Damo]

Did anyone see Gaybo & the Late Late Show on Friday. When asked by Tubs about the economy and prospects for next year Gay said he felt 2010 was going to be a bloodbath ( a rather poor choice of words tbh). This follows the Big Fella (Ben Dunne) two weeks ago, who said something similar. I think perception is reality for a lot of people on the back of RTE telling us all we're in the doldrums we probably will stay there for the foreseeable.

There was also a thing on Saturday Morning Radio 1 with John Murray. His show is called the business. They were around Dundrum on Saturday spying on the number of shopping bags people carried as being the best KPI. Apparently there werent many bags evident though this was on around 10 or 11am.

We maybe out of it technically but consumption is still in decline and that's the real indicator in my view. Retail/Hospitality jobs under big pressures next quarter.

[dahamsta]

While I wouldn't put a lot of stock in Greybo and VisitMyWebsite Coke Fiend, I'd have no hesitation in agreeing with them on this, and I'd have no problem with the Irish hearing about it. There's still far too many people in the shops imho, if they keep that up and we pull out or recession too early there'll be another bubble, and the next time we come down it'll likely keep us there for 10 or 20 years. We needed a funt up the arse, and, unbelievably, we don't seem to be have really noticed it yet.

All of the above is meant collectively of course. I completely understand that some are feeling it worse than others. I'm shocked by the number of people in the shops though, not just in the lead up to Christmas but for months now. Mahon Point in Cork is absolutely jammed on Sundays, it's bloody crazy.

[Macy]

They've done nothing about job creation, job saving and have taken money of the people that spend pretty much all the income. How can we not be over the worst?

[Fr Damo]

They've done nothing about job creation, job saving and have taken money of the people that spend pretty much all the income. How can we not be over the worst?

Peak to trough on Asset valuations of about 65% don't make good reading meaning the banks can't borrow internationally,Nama money isn;'t through yet, and then Prof Hounihan said the big two will need more government capital thus shredding share prices today!
Yeah, i think we have a bit to go yet.

[dahamsta]

I wouldn't be surprised if we dip back into recession before coming out of it properly. I stand by my prediction of end 2010 before we see proper, tangible growth.

[eamo1]

Of course we are out of recession,Ireland voted Yes to the Lisbon Treaty and we were promised it would be good for the economy and jobs if we did,so of course we're out of it.

[dahamsta]

I hate to sound like Bertie, Blair or Bush, but Lisbon is done, there's nothing you can do about it bar make noise in the right places. This isn't one of them.

[Fr Damo]

I don't think Joe Public believed/thought Lisbon 2 was going to be a light switch in terms ofkick starting the economy, though things have gone very quite with it from the No side.

Dublin corpo are cutting Business rates by 2% this year, a clear acknowledgement we aren't out of the woods by any stretch. Begs the question though, if the pay required to administer such rates is being cut by 5%, 7.5% etc etc, inputs are falling interms of inflation at 5.5% anyway, why is the rate cut only 2%?
Looking forward to what Roscommon Co Co are going to do for me!

Prime time was interesting last night, nothing new, though we got an insight as to why were as deep as we are in this country. We have been held to ransom, and though I supported it at the time, NAMA is looking like a bit of a pup. I trusted A. Ahern, though M. Kelly seems to be closer to the mark.

[pineapple stu]

I don't think Joe Public believed/thought Lisbon 2 was going to be a light switch in terms ofkick starting the economy

I know people who changed from No to Yes because of the recession. Don't underestimate how stupid people can be.

I wouldn't be surprised if we dip back into recession before coming out of it properly.

I'd be surprised if we didn't, to be honest. Let's see what happens after the Christmas sales, for example. Or after a second awful January in a row for the motor industry. Still plenty of businesses to go, unfortunately. I'd say a lot are still living off the fat they'd built up.

[mypost]

I don't think Joe Public believed/thought Lisbon 2 was going to be a light switch in terms ofkick starting the economy.

They did. That's what the posters told them. That's what the politicians told them. Did it happen? Did it what?

Spending might be up, but there won't be visible signs of recovery, until there is significant job creation. And that could be several years away yet.

[Fr Damo]

Had to grin yesterday when Biffo implied we know where we stand now as compared to last December. Also VT clips of prime time & Pat Neary saying " the Irish Banks are soo well capitalised ". What a joke.

Edege and abyss come to mind.
Certain sectors of the media seem to have forgotten we still need to borrow 20Billon squid next year to run the country & I'm begining to think we'll struggle cos these banks of ours are literally insolvent. They won't be in any hurry to lend in 2010 thus leaving tax receipts down on targets. Stu, I forecasted 60,000 newcars sales for this year, what did we hit?
I'd reduce that to 45000 - 50000 next year. Second hand car market is doing ok in the 5000 - 6000 range i.e bought with savings out of necessity rather than with loans or finance. Some good value out there - if you didn't own one already!

[pineapple stu]

Stu, I forecasted 60,000 newcars sales for this year, what did we hit?

Not sure countrywide, but I know 09-D-29000 or so went out last week. I'd say you were probably under, but not by a huge amount. That's back to 1988 levels. There's more demand than that out there, but people are finding it next to impossible to get finance. From next year, some finance houses won't finance VRT, so it'll be even harder to get finance.

[Macy]

why is the rate cut only 2%?

Less other money coming in from development levies and central funding is/ will be down.

We have been held to ransom, and though I supported it at the time, NAMA is looking like a bit of a pup

Well I never supported, but it looks a dead duck now anyway. They might've got the con job done if they'd moved quickly, but as in everything else since the collapse they can't make a quick decision which is fooking us up even more.

There's more demand than that out there, but people are finding it next to impossible to get finance

It's also the trade in values that people are getting, if they'll even take a trade in at all. It's there that the scrappage scheme will have some impact imo.

[pineapple stu]

It's also the trade in values that people are getting, if they'll even take a trade in at all. It's there that the scrappage scheme will have some impact imo.

This is true too. Though haven't heard of garages not taking trade-ins; worst case scenario, there's usually a trader willing to buy them off the garage immediately.

The scrappage scheme won't have too much impact, I'd say. It'll mainly affect low value cars (Micras and the like) and - without looking at figures - I'd say it's the higher end stuff that's being hit the hardest. The scrappage scheme won't make much difference to sales of Audis, BMW, Mercs, VW - saloon cars, basically. (Course, the argument is there as to whether it's a good thing that we now aren't buying new BMWs every other year).

[Macy]

This is true too. Though haven't heard of garages not taking trade-ins; worst case scenario, there's usually a trader willing to buy them off the garage immediately.

I have, but it's more common that they're giving such a low value that people are saying no to it, especially if they've existing finance.

[Fr Damo]

[QUOTE]

Not sure countrywide, but I know 09-D-29000 or so went out last week. I'd say you were probably under, but not by a huge amount. That's back to 1988 levels. There's more demand than that out there, but people are finding it next to impossible to get finance. From next year, some finance houses won't finance VRT, so it'll be even harder to get finance.

Sale to end of Nov 09 = 57151
Sales for Nov 09= 520

If sales for Dec remain about the same levels we are looking at 57600 new cars this year. Down 62% on last year (151,000 Vehicles)

Remember watching prime time about April or May last year and some clown was on from SIMI saying they were still hopeful of 100,000 vehicle sales. I would say the break even point for the Irish Car "Industry" is about 80 - 100 thousand vehicles.

The real indicator is goods vehicles, down 69% in both the light commercial sector (vans) and HGV sector (truck and lorries). This indicates that consumption and internal demand isn't going to pick up anytime soon in my opinion, and therefore the title of this tread although technically acurate, much ado about nothing!

www.simi.ie - New Vehicle Registraions.

With the phasing out of VRT, expect car prices to erode value over the implementation period, expect further job losses in this area of the economy and thank FF / Greens. (FF for bringing in VRT and the greens for the tax band changes)

Downing Street, take us back.

[Macy]

(FF for bringing in VRT and the greens for the tax band changes)

Nothing wrong with moving to emissions based taxes, the problem was annoucing it months before it was going to happen.

[Royal rover]

Wait until interest rates go on the rise that's when the s**t will really hit the fan for lots of people - next year will be worse than 2009 - when i read stories in the indo about 20,000 people looking for social housing it will be up to 60,000 by end of next year guaranteed, i think stats are a very misleading sometimes officially they might show one aspect of recovery but it's stil lvery far from the truth

[Fr Damo]

I think stats are a very misleading sometimes officially they might show one aspect of recovery but it's stil lvery far from the truth

"Lies, damned lies, and statistics" is a phrase describing the persuasive power of numbers, particularly the use of statistics to bolster weak arguments, and the tendency of people to disparage statistics that do not support their positions.

WIKI Defenition!