Optimism is as infectious as pessimism
Published 10/02/2016 | 02:30
As often as possible, I try to visit Dublin on a Sunday. It's nice to stroll around town, have lunch in one of the numerous good restaurants and spend an hour or two in the book shops and then head home again.
Traffic is quiet on weekends and if you get in early enough, there is always parking space available. It's good to get out of the countryside now and again and if nothing else, it gives me a great insight in to how our economy is really doing.
I will never forget arriving in Dublin one Sunday in 2008, a few weeks after the recession had hit and being amazed at the way the city had emptied.
Everyone had clearly decided to stay home and stop spending. Most street parking spaces were free and for someone coming to town from the countryside, this was about as good as it gets.
Ok, I have to accept that nowadays where I live and farm is very much in the commuter belt and part of the Greater Dublin Area, but it is still mostly farmland and I can easily forget that our largest city is little more than 30kms away.
When I visited the city last month it was abundantly clear that few people were thinking about recession or austerity. The pubs and eating places were crowded and the parking spaces were full. Looking across Dawson Street, a large building was being demolished to make way for a more modern version.
A huge crane towered above the ruins, further evidence that once you see these signs of activity back on the skyline, things are very much on the up. You could almost hear the developers rubbing their hands with glee and saying to each other: 'Boys, we're back!' But so much of all this is in the mind really. Optimism is just as infectious as pessimism. The business cycle is behaving as normal and after a few years of gloom and doom, it appears we are now ready to start spending a bit and think positively again.
However, the situation might be slightly different from a farming perspective.
The OECD recently published a paper on income and tax in Ireland which tells us that in 2004, 7.1pc of the top one percent of earners were farmers while 20pc of this cohort were employed in finance, insurance and real estate. This had altered dramatically by 2012 when only 2.9pc of the top one per cent were farmers, while the share of the finance, insurance and real estate sector had increased to 31pc. The 2015 figures should make interesting reading.
It is also interesting to compare the mortgage and deposit rates available from AIB in different parts of the island of Ireland. In the Republic the AIB mortgage rate is over 1pc higher than in the North.
Even stranger, the deposit rate we are being offered here is 0.45pc but in the North it is 1.1pc, which is more than double what we can get in the South. KBC offer current account holders 1.35pc in the South and Bank of Ireland are offering 0.65pc to online customers and a miserly 0.35pc to off line customers. My thanks to Brendan Burgess of www.askaboutmoney.com for this information.
The recession ended some time in 2013. At least that is how I viewed it from the increase in lorry traffic on our roads and the slow revival of the housing market in Dublin.
There are still black spots throughout Ireland, but a sure sign of rising optimism is the way the banks are again vigorously advertising mortgages, along with loans for new cars and holidays.
They are of course still screwing us with high interest rates for borrowing along with those derisory rates for cash on deposit.
Have they ever behaved differently?