The End of the Boom

The boom ended in 2007. Although export growth slowed down as early as 2000, that trend was not very serious for the economy because the growth of net foreign earnings did not slow down, due to the changing sectoral composition of exports. The growth of net foreign earnings slowed down eventually in 2005, primarily because foreign-owned manufacturing companies stopped growing. This would probably have brought an end to the boom in the economy were it not for the housing boom. The housing boom and its associated financial inflows kept the economic boom going for another couple of years. The housing boom ended in the collapse of the construction sector and ultimately the banks, with disastrous consequences for the economy. The Irish housing boom and slump was not a unique occurrence involving uniquely aberrant behaviour since other housing booms and slumps had occurred in many countries. However, the Irish case had more severe consequences than most such booms, partly because the Irish housing boom lasted so long and partly because a major international recession and financial crisis exacerbated the consequences of Ireland’s housing boom.