Disease may wipe out the boom

Ever since we realised that the Irish economy was in Goldilocks territory of its own, commentators have been looking for the event that will bring it all to a cataclysmic halt.

With enviable insouciance we've seen off a couple of Asian crises, Russians playing roulette with their country's social and economic structure, and a variety of political and financial scandals that should have shaken us to the core. But the Irish economy has confounded everyone's attempts to call the turn. It would be ironic if, having escaped the modern debacles that have rocked different parts of the globe over the past few years, it was the old-economy agricultural sector that finally brought the Irish boom to a juddering halt.

As with any potentially catastrophic event there are numerous schools of thought on how disastrous foot-and-mouth disease could be for Ireland (with or without a serious outbreak). There's no doubt that agriculture as a percentage of GDP has declined over the past five years, but that can be attributed as much to growth in new industries as to a decline in agriculture itself.

While agri-industry may not be as badly hit as those with vested interests in compensation will certainly suggest, the knock-on effect on the food sector, banking, tourism and related industries could be severe and certainly enough to knock us off our perch.

It seems extraordinary to me that a virulent disease that can cause so much chaos to the fabric of a country isn't the subject of a major inoculation initiative. What we've had since the 1960s' scare has been Angel Dust and growth hormones and goodness knows what else pumped into our meat, but nothing to actually prevent something as infectious as foot-and-mouth.

And given that the transporting of animals seems to be some incredible merry-goround of marts, markets and farms (where value-added seems to have a meaning all of its own), you'd imagine that the prospect of another outbreak would always have been at the back of farmers' minds. Maybe it's because I'm a townie who breaks out in a rash even driving past a farm, but it seems to me that priorities in animal health are strangely skewed.

Back in the non-agricultural sector, the NCB purchasing managers' index has shown that the pace of expansion in manufacturing is now at the slowest recorded since January 1999. The index registered 52.1 in February, which does indicate that manufacturing is still growing, but the decline in the rate of increase reflects the fact that new orders are now slowing down.

Interestingly, the home market is still the principal source of new business for manufacturers, while demand from export markets is little changed. In the past, export orders were a mainstay of growth in the index but demand has weakened off significantly over the last few months.

In financial markets, turnarounds are always fast - we've seen that's the case with economies and industrial sectors too over the last year. It's as though the collective consciousness suddenly accepts that all of those gloomy forecasts and dismal predictions are definitely going to come true and confidence just drops like a stone.

That's why everyone in the States was watching Federal Reserve chairman Alan Greenspan's testimony so closely last week. The University of Michigan's Consumer Confidence Index (where would we be without all these indices!) showed another significant drop, although not quite as much as the most pessimistic forecasts.

Expectations are still low, too, which means that nobody in the States thinks that the Fed has done enough on rate cuts yet. The markets were very disappointed that Greenspan didn't announce yet another cut, although I'm surprised that they are thinking like this at all.

Cuts between FOMC meetings are, as most people know by now, very rare and Greenspan did comment that while confidence was lower it was still "at a level that in the past was consistent with economic growth". The problem is that slow and steady growth isn't enough for many businesses or investors in the States any more. They're used to spectacular and if they can't have spectacular they want rate cuts.

Many Fed officials continue to express the view that the downturn is a temporary setback and that growth may resume later in the year. But that's not good enough for businesses either! The technology sector continues to be pasted, not surprisingly since so many companies are issuing profit warnings, but I'm beginning to think that finally it may begin to offer some value to investors. These stocks are real boom-and-bust vehicles and the carnage that is so much of the sector is only what it deserves. But just because a company now operates in either the telephone or technology sectors doesn't mean that it must automatically be ready to collapse.

The problem for those companies is that they're also suffering a credit squeeze. Last year you only had to shout "phone/tech" for the shekels to come raining in. This year you're lucky not to be assaulted by flying rocks.

Still, the mobile phone market is far from being saturated. Though I still wish phone etiquette was part of the contract when people bought them. A few months ago I wrote about the guy who resigned from his job on the Enterprise Express to Belfast via his mobile phone.

I recently visited Cork and managed not to listen to the variety of phone calls going on all round me as I sat in the train. But I couldn't avoid the one in the hotel the following morning.

I'm not at my best at the breakfast hour anyway but I was really tempted to go over to the guy at the table opposite me and shove his phone down his throat. He spent about 20 minutes complaining loudly about the company he worked for in what should have been a private phone call.

He didn't mention the name of the company (I could guess) but he talked about the product and a potential future launch and how the Irish division was always bottom of the pecking order and how the product mightn't be that great anyway.

On that basis I feel that his employers should know what he thinks and I am very tempted to give you all the rundown - if the whole company operates like this guy then the shares are a big sell! However, I don't want to be the cause of yet further carnage in equity markets so I'll stay silent. Which is what he should have done.