economic outlook
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Economic Outlook
An Bord Bia Annual Food and Drinks
Industry DayNovember 05, 2009
Austin Hughes, KBC Bank
It’s Not the Great Depression… But It’s Close
Normal Service Resumed?
OECD Total, Composite Leading indicators, amplitude adjusted
Source: Reuters EcoWin
62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10
Indi
cato
r
90.0
92.5
95.0
97.5
100.0
102.5
105.0
107.5
110.0
Wealth Destruction Will Restrain Recovery
United States
House Prices, S&P Case-Shiller, National, SA, Index, 2000Q1=100
Standard & Poors, 500 Composite, Index, Price Return, Close, USD
Source: Reuters EcoWin
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
Inde
x
70
80
90
100
110
120
130
140
150
160
170
180
190
200
Inde
x
0
250
500
750
1000
1250
1500
1750
Credit Still Crunched
Ireland, Real Estate and Rental and Leasing, Residential mortgage lending (incl securitised mortgages), EUR [c.o.p 12 months]
Euro Zone, Monetary Financial Institutions, Loans, Households and NPISH, Lending for house purchase, Amount Outstanding, EUR [c.o.p 12 months]
United States, Mortgages, 1-4 mortgage debt outstanding, end of quarter (FOF), USD [c.o.p 12 months]
S ource: Reuters E coW in
00 01 02 03 04 05 06 07 08 09
Perc
ent
-5
0
5
10
15
20
25
30
35
US Economy Is Turning
United States, SA
New Home Sales, Total, AR
House Prices, S&P Case-Shiller, Composite-10, Index, 2000M1=100 [c.o.p 12 months]
S ource: Reuters E coW in
88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
Num
ber o
f (m
illions
)
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1.3
1.4
Perc
ent
-25
-20
-15
-10
-5
0
5
10
15
20
25
30
A Bumpy Road Lies Ahead In Europe
Gross Domestic Product, Constant Prices, SA
Eurostat, Euro Zone, Expenditure Approach, Total at market prices, Chain-linked, Cal Adj, Chg Y/Y
United States, National Income Account, National Product Account, Overall, Total, AR, USD, 2005 prices [c.o.p 4 quarters]
Source: Reuters EcoWin
96 97 98 99 00 01 02 03 04 05 06 07 08 09
Perc
ent
-5
-4
-3
-2
-1
0
1
2
3
4
5
6
Out of Balance
United Kingdom, Constant Prices, SA, Index, 2005=100
Production, Manufacturing
Retail Sales, Predominantly food stores
Retail Sales, Predominantly non-food stores, total
Source: Reuters EcoWin
89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
Inde
x
50
60
70
80
90
100
110
120
The Other Side Of The Coin
Spot Rates, Close
Euro Zone, EUR/USD United Kingdom, EUR/GBP
Source: Reuters EcoWin
74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10
EUR/
USD
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1.3
1.4
1.5
1.6
EUR/
GBP
0.50
0.55
0.60
0.65
0.70
0.75
0.80
0.85
0.90
0.95
1.00
So What About Ireland?
Irish Jobs Market Has Changed Dramatically
Ireland, SA
Unemployment, Rate, Total (Live Register) ILO Employment, Overall, Total
Source: Reuters EcoWin
Jan May Sep Jan May Sep Jan May Sep Jan May Sep Jan May Sep Jan May Sep Jan May Sep Jan May Sep Jan May Sep Jan May Sep Jan May Sep Jan May Sep
98 99 00 01 02 03 04 05 06 07 08 09
Pe
rce
nt
3
4
5
6
7
8
9
10
11
12
13
Pe
rso
n (
mill
ion
s)
1.3
1.4
1.5
1.6
1.7
1.8
1.9
2.0
2.1
2.2
2.3
Right hand side Left hand side
A Paler Shade Of Grey
Ireland, Unemployment, Overall, Total (Live Register), SA
c.o.p val 1 month
Source: Reuters EcoWin
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
Perso
n
-10000
-5000
0
5000
10000
15000
20000
25000
30000
35000
House Prices and Building Still Sliding
Ireland, House Prices, Permanent tsb, National, standardised, EUR [c.o.p 12 months] Housing Starts [ma 12]
Source: Reuters EcoWin
Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul
05 06 07 08 09
Per
cent
-15
-10
-5
0
5
10
15
20
10000
20000
30000
40000
50000
60000
70000
80000
Budget Worries Persist
Ireland, Cumulative, EUR
Revenue, Tax revenue [c.o.p 12 months] Expenditure, Voted (Departmental expenditure voted annually by the Dail) [c.o.p 12 months]
Source: Reuters EcoWin
Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul
04 05 06 07 08 09
Per
cent
-30
-20
-10
0
10
20
30
40
Irish Consumers Slightly Less Gloomy
Ireland, Index
Retail Sales, All businesses, Linked and Rebased, Current Prices, SA, 2000=100 [c.o.p 12 months] Consumer Surveys, Consumer Sentiment Index (KBC Bank Ireland/ESRI), 1995Q4=100
Sour ce: Reut er s EcoWin
96 97 98 99 00 01 02 03 04 05 06 07 08 09
Per
cent
-40
-30
-20
-10
0
10
20
30
Inde
x
30
40
50
60
70
80
90
100
110
120
130
140
Poorer Sentiment Has Hit Spending
Ireland, Index
Consumer Surveys, Consumer Sentiment Index (KBC Bank Ireland/ESRI), 1995Q4=100
Retail Sales, Food businesses, Constant Prices, SA, 2005=100
Retail Sales, All non-food, Constant Prices, SA, 2005=100
Source: Reuters EcoWin
Jan May Sep Jan May Sep Jan May Sep Jan May Sep Jan May Sep
05 06 07 08 09
Inde
x
30
40
50
60
70
80
90
100
110
Inde
x
90
95
100
105
110
115
120
125
130
Diagram 4: Turning to the broader Irish economy, how do you feel compared to three months ago?
33%29%
17%
40%
3%
81%
3%
86%
1%
83%
3%
79%
6%
73%
8%
63%
0%
20%
40%
60%
80%
100%
Autumn2009
Summer2009
Spring2009
Winter2008
Autumn2008
Summer2008
Spring2008
Winter2007
Increased
Decreased
Diagram 1: Apart from normal seasonal patterns, how has your company's level of business changed in the past three
months?
22%
49%
16%
59%
9%
69%
12%
66%
16%
59%
22%
45%
29%
40% 41%
23%
0%
10%
20%
30%
40%
50%
60%
70%
Autumn2009
Summer2009
Spring2009
Winter2008
Autumn2008
Summer2008
Spring2008
Winter2007
Increased
Decreased
Diagram 2: Apart from the normal seasonal patterns of the next three months, do you expect your company's level of
business activity to?
27%
35%
21%
45%
17%
59%
13%
62%
18%
52%
30%
38%38%
31%
46%
19%
0%
10%
20%
30%
40%
50%
60%
70%
Autumn2009
Summer2009
Spring2009
Winter2008
Autumn2008
Summer2008
Spring2008
Winter2007
Increase
Decrease
Commodities Still Say The World Is Changing
World, USD
Energy, Oil, Light Crude Spot (WTI), Nymex
Grains, Wheat, Futures 1-Pos, CBOT, Close
Source: Reuters EcoWin
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
USD/
Barre
l
0
25
50
75
100
125
150
USc/
Bush
el
200
300
400
500
600
700
800
900
1000
1100
1200
1300
Where Next For Food Prices?
Consumer Prices, Index
Ireland, By Commodity, Food and Non-alcoholic Beverages, Total, 2006M12=100 [c.o.p 12 months]
Ireland, By Commodity, All Items, Total, 2006M12=100 [c.o.p 12 months]
United Kingdom, By Commodity, Food and non-alcoholic beverages, 2005=100 [c.o.p 12 months]
Eurostat, Euro Zone, Food and Non-alcoholic Beverages, CP011, Food, 2005=100 [c.o.p 12 months]
Source: Reuters EcoWin
97 98 99 00 01 02 03 04 05 06 07 08 09
Perc
ent
-7.5
-5.0
-2.5
0.0
2.5
5.0
7.5
10.0
12.5
15.0
Summary
The recession is over
The hangover will persist
Recovery will be bumpy
Confidence and costs hold the key
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