The graph below outlines the explosion in new Irish bank credit directed towards financial sector and personal lending (including mortgages) before and during the so-called ‘celtic tiger’ years.
[Source: Central Bank of Ireland Annual and Quarterly Reports, 1988-1998]
Irish bank credit directed towards manufacture barely rises until the late 1990s – it actually drops during the early 1990s.
The explosion in personal lending and credit directed towards financial intermediation is the defining narrative of those years, not manufacture.
This is the miracle right here. The exceptional growth in the local economy (and the modest until 1996 growth in jobs) was driven in the main by personal and financial intermediation credit.
(The growth in the manufacture sector during this period is in profit returns and booked exports – it sees the figure for Ireland’s GDP rise as a result. The figures are untrustworthy, though, due to the accounting practises of foreign companies in Ireland. Profits and exports are booked in Ireland for tax purposes. The actual growth in jobs in manufacture during this period is quite modest, and certainly not of a scale to constitute a ‘miracle.’)
This is reflected in the growth in jobs during this period – the main sectors to see growth were retail, banking, finance, construction and real estate.
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The neglect of the ‘real’ economy during the boom years is confirmed even by Davy stockbrokers: http://www.davy.ie/content/pubarticles/economy20100219.pdf