We are regaining competitiveness

[imported_Déise]

Prices in Ireland are declining 4.7% or 1.7% using the standard EU measure of HICP.

Eurozone inflation is 0% (HICP).

So we are getting relatively cheaper.



http://www.cso.ie/releasespublicatio...urrent/cpi.pdf
http://www.cso.ie/releasespublicatio...urrent/pic.pdf


http://www.irishtimes.com/newspaper/...breaking36.htm
Annual deflation rate hits 4.7% - The Irish Times - Thu, Jun 11, 2009

[feargach]

Devil's in the detail, old chap. Where exactly are prices falling?

Also, incomes have fallen a damn sight more than 4.7%, so adjusted by what people actually have available to spend, prices have probably risen.

It appears the falls are mostly in interest rates, so no good to people without debts, or with non-variable debts.

Food, clothes and footwear costs have also fallen over the year as have prices for transport and furniture. However, alcohol, tobacco, health and education costs have all increased.

In May 1933 prices fell at 6.9 per cent.

[dmc444]

I think though that has taken in to account the fall in Interest rates and Oil, so it could be a temporary fall, as fuel is climbing and after the quantitive easing period finishes interest rates will have to rise by at least 2-3.5% to keep inflation down.

What we need is Utilities to fall, Food etc as that helps businesses.

Incomes falling is in the long run a good thing, We have to remember there are a Billion indians who will do the jobs irish people do for half of our wages.

[mr_anderson]

Devil's in the detail, old chap. Where exactly are prices falling?

Also, incomes have fallen a damn sight more than 4.7%, so adjusted by what people actually have available to spend, prices have probably risen.

Maybe, but falling salaries also improves our competitiveness.
We have a long way to go, but at least we are getting there.

In fact, even having a situation where wages are falling helps our cause (for jobs), as a company is much more likely to set up in a country where workers are flexible and willing to adjust to market conditions.

[Akrasia]

we need commercial rents to fall significantly to improve irish competitiveness.

Unfortunately, the policies of the government are likely to prop up these rents rather than bring them down as the the NAMA takes control of idle property and sits on it in the hope that it will gain in value over the long term.

A disasterously bad policy that only benefits the developers and landlord class who will benefit from the artificial restrictions on supply.

[feargach]

Incomes falling is in the long run a good thing, We have to remember there are a Billion indians who will do the jobs irish people do for half of our wages.

Maybe, but falling salaries also improves our competitiveness.
We have a long way to go, but at least we are getting there.

Jeeze, I'm glad I have no mortgage!

Seriously, how do you expect the mortgage situation to work itself out? Probably a quarter of our workforce, at least, will go into heavy mortgage arrears if this wage deflation happens. That's very serious stuff. That is not a minor problem and I need to know how you consider we as a nation would have to deal with it. Tens of thousands of children are involved, remember.

[Dios]

Incomes falling is in the long run a good thing, We have to remember there are a Billion indians who will do the jobs irish people do for half of our wages.

We will never, ever be able to compete with third world countries on wage costs, those Indians will do it for a lot less than half. We need to focus on differentiation, not wage drops.

[dmc444]

Jeeze, I'm glad I have no mortgage!

Seriously, how do you expect the mortgage situation to work itself out? Probably a quarter of our workforce, at least, will go into heavy mortgage arrears if this wage deflation happens. That's very serious stuff. That is not a minor problem and I need to know how you consider we as a nation would have to deal with it. Tens of thousands of children are involved, remember.

Yeah but it might not be the easiest thing to say but running around saying that our wage levels are not a problem is simply not true.

Businesses are leaving Ireland- Why? because the minimum wage is far too high and they cannot afford to pay their workers. I was in Meath last week and the barman had to let 5 of his staff go because he just could not afford to pay them.

You say children are involved but i dont see how their parents being unemployed does them any good.

[Donegal55]

Prices in Ireland are declining 4.7% per year in comparison to 1.7% for the EU.

So we are getting relatively cheaper.

Annual deflation rate hits 4.7% - The Irish Times - Thu, Jun 11, 2009

This is wrong as u are not comparing like with like so I guess u are either a GP or FF supporter

the 1.7 excludes mortgages,
"The harmonised EU annual rate of inflation - which excludes mortgage repayments - was a negative 1.7%"

where as the 4.7 does of which 4.3 is mortgages, so 0.4 is the rest which is nought

We are still being gouged by the multinationals on all fuel costs, which is outside our control as are interest rates so my view is little progress on the domestic embedded cost front.

Petrol in NI can be bought for 94 stg pence, my local is 117 cent euro

[Dios]

Businesses are leaving Ireland- Why? because the minimum wage is far too high and they cannot afford to pay their workers. I was in Meath last week and the barman had to let 5 of his staff go because he just could not afford to pay them.

Dell left Ireland because it was operating on razor thin margins. The rest of the FDI is going nowhere, and in fact is expanding. The barman is having problems because people are cutting back on discretionary spending in overpriced bars, not because minimum wage is too high. I mean look at the average bar, we'll say 5 employees on minimum wage, around €1700 a week. Drop that by 25% and he saves €425 a week, and five employees on fulltime is a large bar. If that much of an expense is going to send him to the wall, his business was never going to survive anyway.