Sharp decline in loans to construction firms
These people really need to learn what percentages mean.
The harsh realities are:
We’re heading back towards 60bn a year growth in PSC. Earlier in the year, we had looked like getting the rate down below 50bn a year, but that’s reversed in the last few months. The drop in the percentages, from 30% yoy to the current 18.9% is almost entirely due to the fact that the outstanding debt has grown so much, which is used as the baseline for the percentage calculation - the rate of borrowing has dropped only slightly.
While the construction percentage drop sounds impressive, again this is substantially due to the growth in the baseline. Construction borrowing has gone from 12.3bn → 19.9bn → 25.1bn. So we’ve gone from a growth rate of 7.6bn in the year to Sep 2006 to 5.2bn in the year to Sep 2007 - considerable, but nothing like the ‘more than half’ drop 61.5% → 26.6% suggests. But ignoring the exact amounts for a second, isn’t it slightly worrying that construction companies in ireland are still massively increasing their debts (effectively doubled in 2 years) going into a clearly signposted slowdown.