Intel send out worrying sign
The move, which will shut down Intel's manufacturing plant outside Dublin for two weeks, is a worrying sign given both Ireland's reliance on foreign direct investment and its deteriorating finances, analysts said.
"A year ago companies in the IT sector were telling us that recovery would happen within three to six months. They keep pushing out the boundaries and Intel's decision to do this is indicative of the tough trading conditions they're experiencing," said Jim Power, chief economist at Friends First.
"From Ireland's point of view, given our dependence on the high-tech sector particularly the US companies in that sector it does suggest the going will remain extremely tough on the FDI side here."
A more aggressive move by Intel, which employs more than 3,000 people at its plant in Leixslip, County Kildare, would have a huge psychological impact on the country, he said.
Ireland's celebrated "Celtic Tiger" boom in recent years was fuelled in large part by massive inflows of foreign cash attracted by some of the lowest corporate tax rates in Europe and a relatively inexpensive, well-educated workforce.
"Generally speaking the economy has entered this phase in reasonably good health, thanks to the boom, and while it has felt the cold shivers of the global downturn...there's nothing fatal about this," IIB Bank Chief Economist Austin Hughes said.
