Q3 National Accounts; Q3 BOP

here and here.

45 replies on “Q3 National Accounts; Q3 BOP”

Pleasantly surprised and it looks like Govt projections of nominal GDP and GNP in 2012 of €163,150m and €130,850m will be met, and even if there is a small reverse in Q4 they should still be met. And despite Budget 2013,the reports coming from the High Street in pre-Christmas trading appear positive.
A shot in the arm for the Government.

A manic effort to look for growth to pay off the stock of debt…….
A dog chasing its tail.

Meanwhile the remaining now microscopic rational (production)domestic economy must contract further to accommodate any growth of consumption via imports.

Comparisons with Q3 2011
“However there were declines of 4.1 per cent in the valued added of Public
administration and defence and of 17.9 per cent in Agriculture, forestry and
fisheries in Q3 2012 compared to Q3 2011 while the value added of Industry
(including building) showed no change over this period”

You can only have growth within the Euro construct via the destruction of rational domestic commerce.
It overpowers all domestic systems…..
Any Euro “growth” will rob us of even further redundancy.

A flesh wound for all the doom porn merchants in these parts. Is that clanking sound coming from Michael’s Saturn V rocket as it is wheeled to the pad?
I assume our man from KL will be along with a bowser full of cold water.

The only labour intensity like growth is the call centre economy -a vision of hell on earth.
Meanwhile traditional “manly pursuits” gets dumped as the energy (ability to do work) needed for these energy intensive operations is needed for our cars and other consumption.

Distribution, transport, software and communication registered an increase of 12.8
per cent in volume in Q3 2012 compared to Q2 2012. Other services increased by
1.1 per cent over the same period. However, the combined decreases in the other
sectors of the economy (e.g. Public administration and defence (-0.7%), Industry
(including building) (-4.0%) and Agriculture (-11.8%)) resulted in a very small
change overall in GDP (+0.2%) between the second and third quarters of the year.

All of the above is a consequence of the extremely non optimum overvalued non national euro currency………

If it cannot grow via bank credit means , it will not grow at all and activities will therefore shift to pointless activities which give no real final value.

If you printed a national currency however call centers would be shown for what they are.
Of no consequence to anything or anybody.

“A manic effort to look for growth to pay off the stock of debt…….
A dog chasing its tail.”

Actually one of the great benefits of sovereign debt financing is that the debt never has to be paid back. If you have a 0% primary surplus and an economy growing at 2% in real terms with 2% inflation, your debt to GDP ratio halves in less than 18 years. The stock of debt stays the same but since it is now below the 60% threshold, nobody cares anymore.

You may not have noticed Carson but Ireland & other euro countries are not sov entities……
You were listening to Alan Ahearne again…………..

The debt will never have to be repaid but one catch………
We must destroy all labour value now……..

Its a all out war against real production.
A office nightmare.


Everything is a copy of a copy of a copy……

You may not have noticed Carson but Ireland & other euro countries are not sov entities……
You were listening to Alan Ahearne again…………..

The debt will never have to be repaid but one catch………
We must destroy all labour value now……..

Its a all out war against real production.
A office nightmare.


Everything is a copy of a copy of a copy……

Was trying to be sardonic. Noonan statement had an if in it. Still true, if global growth surprises on upside in 2013 then Ireland should outperform. If no growth then opposite holds.
Good to see some rebound in domestic demand.

@ SC

While the increase in Services is noteworthy, what’s the story with the apparently very positive Financial account numbers?
”Inward direct investment increased by €12bn in the third quarter of 2012. This was due to increases of €1.6bn in equity investment, €5.4bn in reinvested earnings and €5bn in other capital.
Portfolio investment by non-residents in equity increased by €19.8bn while
investment in foreign debt instruments by Irish investors increased by €21.7bn in the quarter.
Other investment liabilities decreased by €16bn in the quarter.”


“IBEC’s chief economist Fergal O’Brien…..”Exports have slowed since the start of the year because of difficult trading conditions in Europe, but domestic demand has stabilised. The GNP numbers have been very strong over the past couple of quarters, but this is only partly due to an increase in domestic demand. Other factors, such as international profit flows into the country, have pushed GNP higher,” he added.”

Stabilisation of domestic demand? Increase in domestic demand? Or simply “Other factors” to do with international flows of capital?

While a small increase off a low base, it is good to have some more positive news for once. Hardly a “turning point”…Far lower growth rate than say the growth rate in Ireland’s debt, interst bills, etc.

Not much to write home about here.

Quarterly data can be subject to significant revisions as the MNCs may book significant charges in Q4.

For believers in leprechauns and fairytales, services have moved into a surplus. Surely in the words of sages past, we are ‘moving up the value chain’?

Seamus Coffey explained the unusual jump in GNP in Q2, which is reflected in the 12 month data, as related to an accounting for changes in the deduction of GNP profit.

To those who can’t handle the truth, I’m on the frontline myself. Most of my generation did believe that the free lunch was invented and apart from those who have left with bonanzas, most of the rest are still running their shows in the public and private sectors — assumed miracles do have some economic benefit however. Think of the guy on Grafton Street who sold the projector that was used in Knock in Aug 1879!

In short, small changes in GDP or GNP reflect a number of things but overall the GDP data fits better with the official narrative than a negative.

As for that issue of where could 200,000 net jobs could materialise from, maybe Barryroe will deliver the goods — and that’s only a few miles bfrom Ballinspittle!


I expect BoI shares will hit 5 euros on the back of that comment of yours . Unless they are being shorted from KL.

@ MH “In short, small changes in GDP or GNP reflect a number of things but overall the GDP data fits better with the official narrative than a negative.”

With the headline figures looking good, it occurs that it may not be the ideal time for Mr. Kenny to be giving FT interviews seeking debt relief for Ireland….The economy looks as if it is rocketing afterall…!

You wouldn’t send one of them to sell the pig at the market, would you.

Irish Independent “Gross national product fell 0.4pc in the third quarter from the second quarter but rose 3.7pc from the year earlier period. GNP was flattered by contributions from the some UK companies which have located operations here to escape UK tax rules.”

Now that will help matters….We should expect “douze points” from our neighbours.

“GNP was flattered by contributions from the some UK companies which have located operations here to escape UK tax rules” in the Indo

As questionable as it is illiterate. Hasn’t there been a recent trend of companies returning to the UK with corporate tax and other incentives growing – WPP springs to mind.

Interesting that the nominal GDP is up 3.5% year to date which given lowish inflation is again a pleasant surprise. In fact there is little about today’s numbers that is negative, though nothing outstanding either.

It wouldn’t take much for new dawns to be declared.

I wrote the following in Jan 2010 – – 3 years ago short of a month:

Good news at last as economists announce a new dawn after a winter of gloom. Lower costs are already “kickstarting growth” and from behind a desk, increasing shares in export markets have already been discerned from recent cost reductions. However, a European Central Bank (ECB) executive director on Monday, said such people are delusionists. One or possibly two more tough Budgets are needed and rising exports will power rapid growth from 2012.

Many people have wondered if a dyed-in-the wool conservative political class and their acolytes in the senior public service would not be amenable to needed reform after the calamitous crash of the Celtic Tiger, what would it require to get real change?

Well, what’s there to fret about now? Can’t we return to traditional values, a broken governance system and business as usual? Shur, it will all work out in the day!

As for “transformational” public service reform, the options price on that will surely rocket.

We may not even get bad weather for another 30 years!. Lessons to learn my elbow!


Beware of chairborne experts speculating about export miracles.

On airborne issues and the national accounts, a few aircraft sales and purchases can sometimes knock things out of kilter.

Leasing companies with about 1,000 direct jobs have capital assets of more than half of GDP — over €80bn.

@ MH “Leasing companies with about 1,000 direct jobs have capital assets of more than half of GDP — over €80bn.”

Ok, but at least aircraft leasing is a homegrown global business for which Ireland is the centre of competence, with a very highly skilled workforce, etc. Would never have happened without (first) the Shannon tax zone, and two GPA.

“Distribution, transport, software and communication registered an increase of 12.8 per cent in volume in Q3 2012 compared to Q2 2012.” Ireland is clearly a leading centre also for IT…much of it indigenous, but also many JVs where Irish firms get support from big international (mainly US) investors. Again, a positive outcome from Irish policy development over the years, including tax policy.

From a previous thread, I have just posted “IFSC represents most of the 1,047% of Ireland’s total external debt /GDP. No wonder the CT rate is so ‘red line’ for the country.”

So, while the numbers are distorted, the slight positive here is still worthy of acknowledgement. Without help from the international economy, Ireland’s numbers would have been utterly dismal.

Dork – I do accept that the domestic sectors continue to be hammered. It’s a pity that Govt /policy can’t do something more innovative to stabilise business in the country.

I suppose my overriding comment is that one cannot simply divorce GDP from GNP…There are 35,000 people directly employed in the IFSC, thousands more in the other MNC sectors. While I read your comments about lack of proportionate growth in employment in the international economy in recent years, it’s still great to have that international economy right now. If the IFSC gross debt represents most of the 1,000% plus of Ireland’s gross debt /GDP, the IFSC ‘economy’ is very large indeed compared to the rest of the economy. Any recent numbers available on the IFSC and MNC CT take as a % of total CT take?

@ Paul W

I have said in the past that absent the FDI sector, Ireland would be closer to Albania than a typical advanced country.

To chop off 40% of fake exports would still leave €100bn and indigenous exports would only count 20% for that total.

I do also say that the FDI sector has plateaued. Most of the new arrivals are small and of the net jobs added say this year, possibly 50% of the recruited staff will likely come from overseas – – these number s are a State secret.

On exports, I have seen that Glock the Austrian firm that does well in the US, has 600 employed at home; Cerberus Capital Management , the private equity owner of the maker of Bushmaster assualt rifle used in the Newton massacre, is putting the company up for sale.

@ MH
Newtown was horrible…I live within an hour of the place and am mindful of my own children going to school this week in that part of the world. And I am absolutely not a supporter of firearms and the military industry (reinforced by being Irish and working for various institutions who had policies against investment in same). Hopefully they now begin a process to get rid of the automatic weapons…we’ll all feel safer there.

However, America is relatively unapologetic about its guns and right to bear arms…..On finance, their view is generally not an ‘Irish view’ either. The US is unashamedly capitalist and their large industries are competing internationally. Ireland is but a cog in their competitive wheel. Right now, Ireland should be thankful for the international (including US) support it gets. That support has included /does include an increasing upskilling of the Irish workforce. In saying that, I remember being one of the first employees in the IFSC in 1989…Now there are 35,000 looking after an enormous IFSC “international economy”. One thing that would be good to know is whether the IFSC being most of the 1,000% of the Irish gross debt /GDP includes the IFSC’s investment funds (I suspect not). If not, the scale of the IFSC would be truly ‘awesome’.

Bunesses plateau when they mature. The FDI sector has also plateaued. Cannot see why that is surprising or something for anyone to criticise /knock (although there are abusive edges of course that need to be dealt with….).

@ MH
I should distinguish between the international help that Ireland gets via FDI and the support it gets via the Troika. In relation to the latter, the bank guarantee, odious’ debt requires a direct and possibly forceful solution. I have written here before that the Greek restructurings provide ample precedent. However, no point (for now) revisiting that subject in detail.

Very Happy Christmas to you.


I accept your contention that many FDI jobs in Ireland go to foreigners. But what about their spending providing other job opportunites through the multiplier effect?

We might be fecked. But it HAS to be acknowledged we’re less fecked than it looked in mid-2011 with borrowing costs (had we been able to borrow) at 14%.

GDP and GNP are growing. Not by enough to generate a primary surplus soon, but they are growing. The problem out there is systematic, not Irish, and its solution will take a systematic change in approach. To date that’s been slow, it’s been feeble, it’s been often misdirected. But it’s happening.

As I said, we might be fecked. But the mid-2011 doommongers (remember how vitally important CDS levels were to yiz?) would want to acknowledge a shift in the likely outcome of the current mess.

The men in the blue suits were somewhat different characters in 1980


Programmes for the night…..
1. The news
2. Muck & luck (our popular farming programme)
3. by popular request – the FF annual retreat.
4. by way of contrast – pint out , our cultural programme

But first our worst .

17.00 Minister Fritz (Gene Fitz)………minister for inactivity

“What about jobs you may ask ?”
“sure – I am the responsible minister though not I hasten to point out the minister responsible”

33.00 minutes to 39 minutes is good fun….

Whats really funny is that this post 1979 universe is over…….
Back then the machines were replacing the people…….
“increased productivity ”
Now people must replace the machines again.

Unless you want to live in Alan Ahearnes world

or in the Prophetic words of Frank Hall himself

“Those dangerous few who try to turn us in a carbon copy of West Germany”

Also At 11 minutes ……
2 of Corks leading Analysts back in 1980

Do you know what they meanssss -harder work for the same money !! thats what they means boy
Who does Genie think he is talking to
Since he got the Aul Merc he thinks he is a industrialist

I hear Cha – he has been sacking imaginary workers…

Them lads up in the Dail are the same as me and you cha.
The only reason they go to the Dail boy is to sign on for their money…


@Dork of Cork.
Do you have a blog site or similar?
While everyone argues over the minutiae, it seems that perhaps the context of our decline is being missed by those who should understand it. You seem to be one of the few people out there who has a sense of the broader cancer in our system.

@ Dork
Very good, enjoyed that. Always remember the way Mia would talk with such authoritative BS…..clearly a tradition carried on my the modern ‘pretenders’.

The demand collapse numbers from Constantin are startling to say the least.

If you cannot change the currency or the odious debt level, what other way is there? If Ireland’s international economy is actually substantively separate from and untouched compared to the domestic economy, can one separate both (to assist the domestic economy /GNP). Just thnking…like.

Very Happy Christmas to you & all in Cork.

@Paul W
Yes…………the Corkish Gene – very heavily concentrated down south like.

Happy Christmas.

@ Dork

We need to revamp the divining gift. A few ‘Oil Diviners’ (AKA Corkish Genies) could reverse that oil consumption /extraction equation…Genie JR! There is hope yet….

Yes ,
Believe it or not Cha & Miah were talking about complex economics….

Perhaps Philip Pilkington could talk better about the deep monetarism that was building at that time.
I.e. they raised interest rates in response to inflation when inflation was caused by banks giving credit which bought cars.

But despite the rising prices we had a oil glut beginning to form.

The Gene Fritz thing at 17.40 is very incisive ……….

We had rising energy prices but rising BTU consumption also – despite oil shocks – there was pressure in 1980 to remove workers from the industrial system…..thus the remaining workers became more productive.

Eventually after a reduction of oil consumption in the British isles during the early 80s (as a result of Industry going elsewhere) when monetarism became more settled in the mid 80s and beyond people began working in the service industry.
The modern version of which is the dreaded “call center”

Increasing energy & especially oil & gas rather then coal consumption.

But the last thing we need now is more bloody call centers……
Farmers for example clearly need workers to reduce diesel consumption through their input structure.
But the banks won’t produce national money so the tokens are not available as there is no Greenbacks in the eurozone and very little in the Anglo world.
We need real primary & secondary workers again rather then tertiary workers…..
However the banks have stopped the flow so as to maintain the now global wage arbitrage….
Meanwhile we have few workers with the skills now as the society has become heavily Feminized in response to the office work envoirnment.

Oil cannot replace workers now….

I.e. they cannot become more “competitive”

But we need more real workers despite this or indeed because of this.

@IT Guy
Attention deficit disorder I am afraid…….

Could never manage to keep it all together.

I hope I don’t have this guys Genes………


@ Rory

I accept your contention that many FDI jobs in Ireland go to foreigners. But what about their spending providing other job opportunites through the multiplier effect?

@ Edward v2.0

Sean O’Sullivan reckons that “high economic value immigrants” generate 4-6 new jobs for every one they take.

Of course there is a multiplier impact that is likely higher in manufacturing than services. However, 100 new jobs doesn’t generate 400-600 additional ones. Sean O’Sullivan’s “high economic value immigrants” refers to job creators.

The estimate used by IDA Ireland is 0.7 for the number of indirect jobs created for every direct one. That is based on work done by Indecon, the management consultants.

Anecdotally, from talking to a supplier to Pfizer and reports on the impact of the closure of Dell in Limerick in 2009, I would think that the demand for both material inputs and services would be greater in manufacturing.

On immigrants, the February PayPal announcement of 1,000 additional jobs in coming years, was the biggest (from memory) single Irish agency supported jobs project this year. In July, Louise Phelan, the Ireland chief, said Ireland suffered from a “deficiency” in workers with second languages. “We are a gateway to Europe but we need to ensure we are supporting the languages. Absolutely there is a deficiency in languages in Ireland. I am bringing in 50% of our language cover I require from 19 other countries.”

She added that this was imposing additional costs on the company. Each job is also subsidised by the taxpayer. The average number of foreign nationals on the Live Register in recent years has been at 75,000.

In the EU, nearly 80% of children were studying a foreign language at primary school in 2008; in Ireland the level was 3%! In Malaysia, a Chinese-Malaysian child learns: Malay, Cantonese, Mandarin and English!

Increasing the rate of startup creations with employees is crucial and such immigrant startups should be strongly encouraged.

Elan was founded in Ireland in 1969 as a drug-delivery business, by American chemist Don Panoz, to facilitate the development of the technology behind the nicotine patch.

Immigrants were founders or co-founders of 24% of the US engineering and technology company startups in the past seven years. Indians founded more of the engineering and technology firms than immigrants born in the next nine immigrant-founder countries combined. After India, immigrant founders represented China (8.1%), the United Kingdom (6.3%), Canada (4.2%), Germany (3.9%), Israel (3.5%), Russia (2.4%), Korea (2.2%), Australia (2.0%) and the Netherlands (2.0%). The Irish had a rate of less than 2%.

However, many were educated in the US and worked there for many years.

Contrary to conventional wisdom, over the past decade or so in the US, the highest rate of entrepreneurial activity belongs to the 55-64 age group. The 20-34 age bracket, meanwhile, which is usually associated with big tech names such as Facebook and Google, has the lowest rate.

The typical high tech firm founder is 39!

Startups benefit from being located in the regions where their founders were born or have lived for a long time, according to research on Danish entrepreneurs.

So an Irish technology visa may help but setting “ourselves up to be the ‘Silicon Valley’ of Europe” as Sean Sullivan says, is a dubious aspiration.

Keep in mind that while the high tech sector has many boosters matched by gullible politicians, high growth firms are not typically in high tech.

In 2002-2011, the number of jobs in the high tech and life sciences sectors was static.

As I tried to explain above the call center thingy is a monetary /trade phenomenon.
These are useless “service” jobs as global trade displaces real local jobs.

These service jobs essentially farm the released petro BTU when agricultural goods come in from elsewhere.
They then subsequently buy a car and burn the now released BTU from a destroyed industry.
This is exactly what happened to the UK in the early 80s
“Absolutely there is a deficiency in languages in Ireland. I am bringing in 50% of our language cover I require from 19 other countries.”

Of course Micheal – we have such a absurd economy you see.
Normal lads can’t get a normal job using their hands.
The same goes for London
They cannot employ all of the Saxon lads available as a minority remain well adjusted and thus unsuitable for the job in finance.

This is what happens when a nation is no longer a nation
Given monetary constraints it can no longer use the resources however limited within its own borders.
It must engage in something very pointless so as to grow and pay off the exponential debt.

You are simply witnessing more destruction of capital & labour for no long term return.
Capital must essentially destroy its capital base so as to get a return.

Where is the redundancy in this absurd system I ask you ?

@ Dork

I symphatise with your argument. However, your base argument is based on a properly functioning national economy. It is clear that Ireland’s economy is not functioning properly.

“Capital must essentially destroy its capital base so as to get a return.”
Ireland’s capital is simply being extracted to service debt. Period. I agree that that by definition implies a dysfunctional, deteriorating economy. The slippery slope of Debtors’ Prison. What people don’t seem to acknowledge (widely) is that Ireland’s recovery is not the Creditors’ primary concern. Ireland’s continuing (but declining) health is only of concern to the Creditors in the debt service context. All additional ‘productivity’ , or more accurately ‘cash extraction’ is merelt debt service related. Similarly, the benefits of any ‘improvement’ go to debt service. Hence, the recent €3.5bn budget extraction is largely and increasingly aimed at debt service.

What’s the point therefore in ‘recovery’? Seems to be part of the underlying ‘rationale’ for non reform of the PS (or anything).

In short, Ireland needs a ‘Big Solution’, to rebase the country to a sustainable level. Without that, there is only decline of economic health as the capital base of the country to extracted by its Creditors.

Yes, the lie of ‘recovery’ persists.

Mr Finfacts,
Re your Albanian assertion , could you back that up with some facts. Or is it just another opinion.

@ Tullmcadoo

I have said in the past that absent the FDI sector, Ireland would be closer to Albania than a typical advanced country.

World Bank data for GDP per head in PPP terms in 2011, has Albania at $9k and Sweden and Ireland at $41K.

On a GNP basis, the Irish figure was $32K

There has never been a time since 1922 when FDI wasn’t a factor e.g. Ford, Dunlop and several British companies from the early period; and from the mid-1930s when Guinness moved its hq to its new brewery at Park Royal, London.

So this is a theoretical example.

Looking at data for 1972 when FDI was relatively low compared with today, Irish GDP per capita was 36% of Sweden’s level (GNP at that time was slightly higher than GDP because of emigrant remittances).

In 1972-1990 Irish GNP per head at constant prices rose 34%.
In both 1990-2002 and 1990-2011, GNP per head rose 60%.

According to the 2004 official report ‘Ahead of the Curve’:

“Over the period 1990-2002, exports by agency-assisted indigenous enterprise grew in nominal terms at 5.5% per annum (versus 15.9% for foreign-owned companies). When inflation is taken into account, the real growth in both sales and exports was negligible.”

In 2002-2011, indigenous tradeable exports rose 4% annually in current price terms. Industrial production in traditional industries fell in the period 2001-2010.

From 1990 there was a sharp rise in FDI and the labour participation rate.
The property boom has been washed out of the data and there was no significant rise in tourism and agriculture to offset the flatlined indigenous tradeable sector.

So with the theoretical absence of all FDI, we should allow for some advances ourselves and say a GNP per head figure of $21,000 – – up 38% in real terms from 1972 and in 2011 in line with Poland’s and ahead of Estonia at $18,000 – – and closer to Albania’s than for example to Sweden’s or Germany’s.

The FDI sector also brought important intangible assets: improved standards of management, technical competence, integrity and treatment of workers — the local chief is an employee like everyone else.

thank you for the reply.

The problem thiugh with your hypothesis is that is impossibly to verify.
Undoubtedly if we had never joined the EU and never received FDI and stayed as a DEV wonderland we would have the economy of Albania. That much I would agree with you.

However, we opened up to FDI in the early 1950s and joined the EEC in 1973 (?) so things changed. As a result nominal GDP appears to have compounded at a 10.5% rate since 1972 with both domestic and foreign sectors benefitting.

One problem with your thesis is that it is impossible to seperate the Irish economy into traditional and modern in a neat way and to measure that precisely. W
e also do not know how the economy would have evolved without FDI but within the EU. Would the talent that went into the MNC as managers have created some successful businesses within these sectors. Would there be an Irish Boston Scientific in Galway supplying product to the med tech industry? Equally would this talent have built firms in other sectors?

In you example, the theoretical Irish economy would have compunded at an 8% rate in nominal terms since 1972. Irish GNP per cap would be around 22k-lower than Greece and Portugal. Interestingly if GNP was around 26k in line with the other less successful peripherals, we would be closer to the the developed world than Albania,

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