The Irish Economy

The past week or so has seen a bit of a bounce in debt issuing from Ireland.   The NTMA’s 3-month Treasury Bill programme has almost become routine.  The results of last week’s auction saw a bid-to-cover ratio of more than four and a yield of 0.55%.

The semi-state utilities engaged in longer-term issues with bids for ESB’s 7-year bond covering the €500 million offered last week 12 times while Bord Gais’s €500 million 5-year bond issued today was covered 13 times.

Also last week, Bank of Ireland issued a €1 billion covered bond on offers of €2.5 billion after initially announcing that they would be seeking €0.5 billion.  The bond was given a Baa3 rating by Moody’s, one notch above the Ba1 non-investment-grade rating assigned by Moody’s to the bonds of the Irish government.

Both Moody’s and Fitch issued statements about Irish government bonds last week (covered here) with the only minor change being a change in outlook by Fitch from negative to stable.  Today, there were some largish price moves in Irish government bonds, particularly at the long end. 

The daily report from the Irish Stock Exchange (archived copy) shows that the price of all bar one of the bonds from 2017 on rose by at least 0.8%, with both the 2020 bonds rising by more than 1.0%.  The yield curve has a fairly standard shape and all the yields out to 2025 are below 5%.  The five-year yield from the October 2017 bond is around 3.1%.

Interpret these issues as you wish.

The 1.783 million people working in Ireland can be crudely broken into the following three categories:

• Private-sector employees (1,112,000)
• Self-employed (290,000)
• Public-sector (including semi-states) employees (381,000)

Of the self-employed, 88,000 have employees (who are included in the first category).  Within the public sector, there are 330,000 employees in the public service and 51,000 employees in the semi-state bodies.  A breakdown of employees by category which are full-time and part-time would be useful but is not available.

These figures are taken from the most recent release of Quarterly National Household Survey (QNHS) , though the employee figures used in Table A3 of the release are actually based on the results of the Earnings and Labour Costs Survey (ELCS).

Graphs showing the trend of the three categories since 2008 (the start of the ELCS dataset) are below the fold.

Daniel Gros compares Ireland and Nevada here.

The Economist has a special briefing on how adjustment is proceeding inside the euro area – it is here.