SPEND, SPEND, SPEND

IF you want to buy a BMW 5 in the Republic these days, you'll need £32,000 in your pocket. And a good measure of patience.

A shiny BMW is as good a symbol as any of our economic good times. These days, there is no shortage of people who want to live a little.

Such is the demand for BMWs Motor Import, who distributes the cars to dealers around the country, cannot guarantee supplies before the middle of the autumn.

Last year 1,100 BMWs were sold in Ireland, compared to 800 in 1994, a 30 per cent rise.

A similar amount will be sold this year, says Michael Nugent, marketing manager with Motor Import. "A BMW is a sign of confidence in the economy, he says. "Many of them are sold in the executive market. If the boss doesn't feel it's prudent to drive the car into the company car park he won't buy one.

Usually customers have to wait eight weeks, but the popularity of the new 5 series, means delays are longer. Sales of the smaller (and cheaper!) 3 series are also up by 17 per cent on last year's figures.

In fact the market in new cars is so buoyant that a leading dealer has instructed staff to stop selling new cars until some more second hand cars are sold.

"There is a big overhang of second hand cars in the market," he says. Figures for the first three weeks of May - a month when the motor trade expected sales to slow down - are up 55 per cent on this time last year.

New car sales this year are expected to surpass 106,000 - the Irish record, which was achieved in 1981. Cyril McHugh, Society of the Irish Motor Industry (SIMI) chief executive, says the scrappage scheme whereby the Government pays £1,000 towards the cost of a new car when a vehicle more than 10 years old is traded in, is also helping sales.

He says all motor dealers have experienced some shortage of supplies at certain periods during the year.

IT is not just cars which are much in demand. Historically low interest rates and the boom in the housing market have boosted retail sales. They are rising by 4-5 per cent in volume terms, per year. The biggest demand last year was for electrical goods, fridges, freezers, televisions, furniture and carpets, while the food market remained sluggish.

In 1994, consumers spent £19.5 billion on retail goods and services. Last year the figure was £20.8 billion - a £1.3 billion increase which has reached every corner of the economy.

The amount of money in circulation, although it varies from day to day, has increased greatly over the past couple of years. On May 23rd this year, there was £1,919.6 million in circulation. The figure for the same day last year was £1,738 million and £1,619 million in 1994.

The Central Bank will not comment on these figures, but it is obvious that an increasing amount of money is circulating. Much of the increase is due to higher borrowing by customers and businesses to fund purchases or investments. In fact borrowing is rising so rapidly that it has become a matter of some concern to the Central Bank.

The increasing amount of retail spending has been reflected in increased commercial investment. In Dublin over the past two years dozens of pubs have undergone major renovations, new nightclubs have opened and British multiple stores are scrambling to get a slice of the action. The retail market is not growing in Britain and booming Ireland is highly attractive for the UK companies.

Competition is so intense that there is normally a queue of five or six UK multiples to get into Dublin's Grafton Street. They are prepared to pay in excess of £200,000 key money to acquire a lease. The £100 million Jervis Street shopping development in Dublin, due to open in October, will feature household British chains like Debenhams and Boots.

ALL aspects of the property market, including the commercial market, are enjoying an unprecedented level of growth. Small professional companies, such as accountants, solicitors and consultancies, are driving up the price of Georgian houses; a traditional barometer of how the economy is faring.

Georgian house values, especially around Merrion and Fitzwilliam squares in Dublin, have risen by 10-15 per cent in the last 18 months. This is a strong reflection of confidence in the marketplace.

The residential market boom has been well documented with house prices rising by 15 per cent last year and showing a further 6.25 per cent rise this year.

There are signs that the rise is levelling off. But for now, low interest rates, inheritances and general economic prosperity is fuelling the market.

The effect of low interest rates cannot be underestimated. The repayments on a £40,000 mortgage currently costs about £300 per month at around 7 per cent interest. In 1990 the interest rate: was 12 per cent and repayments; on a £40,000 mortgage would have cost £450 per month, so, people have far more money to spend.

The real winners are those who bought property in 1994, and 1995. One example will suffice: a three bedroom dormer bungalow, in Rathmore Avenue, Kilmacud, Stillorgan, was sold in August 1994 for £78,000. Its current value is £100,000, a rise of around 28 per cent.

Unemployment, another barometer of the economy, is falling and this is most visible in the construction industry. A record number of houses, 31,500, was built last year. And demand is continuing to grow.

"The boom has brought a rapid increase in employment in the sector. In 1993, it employed 71,000 directly. Provisional figures for the year to April show 87,500 directly employed.

WITH more money in their pockets, consumers have not been slow to spend their new found "wealth" on other luxury items, such as holidays. The increase in the numbers taking package holidays has been phenomenal. Last year 340,000 people took package holidays abroad - compared to just 287,000 two years ago.

Short break holidays' abroad are also becoming increasingly, popular as many people have rushed to take advantage of special air fare promotions to European cities. And it seems people have the money to pay for these trips. "Borrowing does not seem to be a factor when paying for foreign holidays," says one travel expert.

But it's not just foreign holidays which are occupying people's free time. Domestic holidays and short break holidays have also grown in popularity. Latest figures for 1994, show that we took 7.4 million trips in Ireland spending £680 million. The figure has grown from just four million trips in 1988. Bord Failte says there has been very dramatic growth in home holidays and attributes much of it to people having more disposable income.

The growth in tourism related spending from both foreign and domestic visitors has not been lost on the tourism industry. Hoteliers and others have spent £1 billion developing tourism as a product since 1988.

Signs are that the good times will continue for the foreseeable future. As one wag remarked last week, if the boom continues it may eventually be in BMW's interest to set up a factory here!