We’ve heard it all before, but this being the leading article of the business section of the Sunday Tribune is a clear sign of the change in sentiment.
OECD: There has never been a soft landing
RECENT research conducted by OECD economists has found that so-called “soft landings” may be more wishful thinking than borne out by experience . . . and the research shows that the end of a property boom usually spills over to other sectors of the economy.
The study comes at an unnerving moment. On Friday, Irish government statistics indicated that unemployment claims had increased 1% from April to May.
The news was enough to spook Davy economist Rossa White, who warned in a research note of “the first tentative sign of housing spillover into the rest of the economy”.
White continued, “However, we do not expect major deterioration in the labour market until late-2007/early-2008. Housing activity reached an inflection point in September 2006: the lags involved are long.”
The jobless numbers came just hours after news of probable job losses at Dell as part of a worldwide cull of 10% of the PC maker’s workforce and days after further job losses were flagged at Eircom and O2.
An OECD working paper dated 17 April 2007, ‘Housing Markets and Adjustments in Monetary Union’, examined studies of 49 residential construction booms in 23 countries. The study did not examine current house price booms such as Ireland’s, and so did not take into account Irish housing completions in the first three months of 2007, down 9% on the previous year according to government statistics
More here: tribune.ie/article.tvt?_scop … e/Business