Ireland technically back in recession but GNP pushed them through.
The Irish economy unexpectedly shrank last year on the back of a sharp fall-off in net exports linked to the so-called pharma patent cliff.
Preliminary figures published today by the Central Statistics Office (CSO) showed gross domestic product (GDP) contracted by 0.3 per cent in 2013.
Economists polled by Reuters had expected full-year growth of 0.3 per cent.
Gross national product (GNP), which provides a better picture of domestic activity as it excludes the profit flows of multinationals, increased for the second successive year, growing by 3.4 per cent.
The latest quarterly accounts indicated import growth outpaced exports during 2013, a reversal in the trend of recent years, resulting in a €1.02 billion decline in net exports.
Despite the pick-up in employment in the latter half of the year, personal consumption, which accounts for two thirds of domestic demand, fell 1.1 per cent.
The CSO’s figures also revealed GDP contracted by a worse-than-expected 2.3 per cent in the fourth quarter compared with the previous quarter.
This was driven in the main by 10.5 per cent decline in net exports and a 4.7 per cent drop in industrial output.
Fourth quarter GNP rose by 0.2 per cent on the previous quarter.
“Today’s numbers show that measured GDP in Ireland fell slightly in 2013,” Minister for Finance Michael Noonan said.
“By contrast, labour market conditions are encouraging. Employment data is a reliable indicator of underlying developments in the economy and figures released a fortnight ago show employment growth of 3.3 per cent year-on-year in the fourth quarter of 2013.”
Much of Ireland’s problems last year stemmed from the expiry of patents in the key pharmaceutical sector, which depressed merchandise exports overall.
However,services exports remained resilient and were 7.1 per cent higher year-on-year in the fourth quarter.
At face value, the 0.3 per cent fall in GDP in 2013 indicates that the Irish economy was back in recession. However, GNP, excluding multinational sector profits, was up 3.4 per cent.
The ECB may wipe out a large part of the Irish Economy
Economist Morgan Kelly’s warning that the European Central Bank is planning a “clean-up” of Irish banks will be taken seriously by government, Minister for Finance Michael Noonan has said.
Economist Morgan Kelly
In a lecture at University College Dublin, Prof Kelly said a clean up of SME bank loans by the European Central Bank may lead to large section of economy being “wiped out”.
Prof Kelly, who was the first economist to predict the likely scale of the Irish banking collapse, said the “real crisis” for the Irish economy may not yet have happened.
Irish Property-Dublin Rises up as the rest keep falling.
The outlook for property prices in Ireland is starting to improve three new surveys show – with Dublin leading the way.
One survey, from property website Daft.ie says Dublin property prices in Dublin rose 5.3% year-on-year with prices in the south now up by 12% in the first six months of the year.
Meanwhile, the latest figures from the Central Statistics Office (CSO) show prices have fallen 1.1% in the last year across the country but have risen in Dublin by 1.3%.
Dublin City
Another report from website MyHome.ie says asking prices in Dublin have risen for the first time since 2007, up 1% on a year ago.
Economist Ronan Lyons, of Daft, says the Dublin market is surging ahead of the rest of the country.
“This is certainly the first time such rapid growth in asking prices has been recorded anywhere in the country for almost six years. The underlying cause is a lack of supply in the capital, while demand has steadily been rising.”
Compare the latest figures with the decline of 15.3% in the 12 months to May 2012 reported by the CSO and it is plain to see how much the market has improved. The increase follows a larger 0.8% rise in April.
In Dublin, residential property prices grew 0.5% in May. House prices grew 0.5%, up 1.3% higher compared to a year earlier and apartment prices in the city were 1.2% lower on May 2012. The apartment figures are based on low volumes and so are open to greater volatility.
The price of residential properties in the rest of Ireland grew by 0.1% in May, the same rate as May last year. Prices were 2.8% lower than in May 2012.
House prices still have a long way to go to reach the highs of 2007 and Dublin prices are 55% lower than at their peak.
The fall in the price of residential properties in the Rest of Ireland is 48%. Overall, the national index is 50% lower than its highest level in 2007.
The figures from Daft show the fastest price rise since the first three months of 2007, just before the property market crashed.
Although prices outside Dublin are falling – 9% lower than this time last year – the rate of decline has slowed sharply from an average of 15% in 2012.
The average property price is €193,000 and the supply of properties for sale is now at its lowest level since the middle of 2007.
Car Sales Boost Irish Retail Sales
New figures from the Central Statistics Office show a rise in the volume of retail sales in January, on the back of strong car sales.
The CSO said that the volume of retail sales rose by 2.3% in January compared to December with car sales growing by 6.3%. On an annual basis, retail sales rose by 8.9% - the biggest yearly rise since May 2005.
But when motor trades are excluded, the volume of retail sales fell by 1% in January from December, while there was an increase of 2.7% in the annual figures.
Among the other sectors recording an increase in sales was the furniture and lighting sector, with sales there up 0.8%, while other retail sales rose 1.5%.
But sales in department stores fell by 4.6%, while pharmaceuticals, medical and cosmetic sales were down 4.1% and books, newspapers and stationary decreased by 3.7%.
The CSO said that the value of retail sales rose by 1.8% in January compared to the previous month, while there was an annual increase of 6.9% when compared with January 2013.
When car sales are excluded, the CSO said there was a monthly fall of 0.3% in the value of retail sales and an annual increase of 0.9%.
"Although there is still a general air of caution among consumers, there does seem to be a view that the worst is over," according to economist Alan McQuaid of Merrion Stockbrokers.
"A key issue going forward will be the state of the labour market, and the signs are encouraging on this front as we’ve seen with the most recent official employment data and the Live Register in recent months."
However, Mr McQuaid cautioned that the continued decline in disposable incomes as well as an increasing tax bill could weigh negatively on consumer spending in the coming months.
Conall Mac Coille of Davy echoed this sentiment and said that, car sales aside, much of the annual increase could be attributed to a reduction in saving.
However he said Davy anticipated a 1.5% increase in consumer spending this year, with exceptionally strong labour market data and spending on car sales potentially pushing that higher.
Irish Central Bank to Crack down on Small Firms
The Central Bank plans to use disciplinary actions against smaller firms that get caught breaching finance rules to demonstrate its seriousness as a regulator.
It says resources have been specifically allocated for enforcement actions in relation to smaller firms, which have less day-to-day contact with the regulator.
"Where breaches by small firms are discovered, we will use enforcement as a reminder that the regulatory rule book is mandatory, and non-compliance is regarded as serious.
The approach "promotes compliance through deterrence", the statement said.
Patrick Honohan, President of the Irish Central Bank
The Probability Risk and Impact System (PRISM) regime used by the bank means most of its resources are focused on supervising the biggest and most systemically important finance firms – including the main banks.
As a result, smaller "low impact" firms are subject to less heavy touch control.
Last year, the Central Bank levied €6.348m of fines and settled 16 enforcement actions against regulated firms.
Yesterday, it set out enforcement priorities for this year.
They include compliance with money-laundering rules and so-called "fitness and probity" regulation setting out standards for staff in the finance sector.
For the banks and credit unions the focus includes compliance with prudential requirements and having adequate systems and controls in place.
Markets supervision will include a focus on large exposures to risk and compliance with international business rules.
On the consumer side the focus will include enforcing compliance with the Code of Conduct for Mortgage Arrears, standards for smaller entities such as debt management firms and a focus on professional indemnity insurance.
The Central Bank also published a programme of what it called "themed reviews and inspections" for the year.
It includes a focus on the fund administration sector, which is a large employer here, heavily focused on the Irish financial services sector (IFSC) in Dublin.
Reviews will also look at advertising of financial products, levels of compliance with rules for lending to small and medium enterprises (SMEs), and publication of information on fees and charges.
The Irish construction industry is facing a skills storage which will hinder its return to growth
New research from the Society of Chartered Surveyors (SCSI) Ireland finds that there will be a growth in construction driven by the private commercial and residential sectors. Read the full Report
Research findings come with a warning that the industry could face a skills and employment shortage in the near future.
It is reported that construction output will increase by 30% by 2018, which could lead to the creation of over 30,000 construction jobs. This will bring total employment to the sector of 178,000.
The report states that this is only possible if barriers to development – such as the skills shortage – can be overcome.
Micheál O'Connor, President of the SCSI
Micheál O'Connor, President of the SCSI, pointed out that while the growth figures may sound considerable, the volume of construction growth will still only reach 7.4% of projected GNP by 2018.
Output in 2018 is expected to be below 2009 output levels, and still a long way short of the optimum level of 12 per cent of GNP which is seen as the European norm, he said.
The industry has contracted enormously from output levels of around €34 billion in 2007 to around €8.8 billion last year, according to O'Conner, who recommends that the government act on three key issues:
“Firstly the recovery is Dublin led with limited signs of recovery in many parts of the country. Secondly the lack of availability of finance for development, for mortgages and in public sector construction is seen as a key barrier to growth potential. And thirdly the employment and skills shortages which will and are arising out of the recovery need to be addressed at a national level,” O'Connor said.
The report, published today, finds that the amount of houses being constructed in considerably less than what it required. In 2013, just 8,301 residential units were completed, while in 2006 it was 89,000.
The ESRI estimates that between 10,00 and 12,000 new houses are needed this year (2014) and next year (2015, after which time, the need will double to between 20,000 and 25,000.
Availability of finance is the big challenge. Almost one-third of the SCSI members surveyed as part of the research said the availability of finance for both developers and buyers is seen as the primary challenge facing the residential construction sector over the next three years. Stakeholders interviewed in the course of the research said development levies, zoning and the need to move to lower density were all seen as barriers to development.
Bonds are much more fun than loans
Ireland technically back in recession but GNP pushed them through.
The Irish economy unexpectedly shrank last year on the back of a sharp fall-off in net exports linked to the so-called pharma patent cliff.
Preliminary figures published today by the Central Statistics Office (CSO) showed gross domestic product (GDP) contracted by 0.3 per cent in 2013.
Economists polled by Reuters had expected full-year growth of 0.3 per cent.
Gross national product (GNP), which provides a better picture of domestic activity as it excludes the profit flows of multinationals, increased for the second successive year, growing by 3.4 per cent.
The latest quarterly accounts indicated import growth outpaced exports during 2013, a reversal in the trend of recent years, resulting in a €1.02 billion decline in net exports.
Despite the pick-up in employment in the latter half of the year, personal consumption, which accounts for two thirds of domestic demand, fell 1.1 per cent.
The CSO’s figures also revealed GDP contracted by a worse-than-expected 2.3 per cent in the fourth quarter compared with the previous quarter.
This was driven in the main by 10.5 per cent decline in net exports and a 4.7 per cent drop in industrial output.
Fourth quarter GNP rose by 0.2 per cent on the previous quarter.
“Today’s numbers show that measured GDP in Ireland fell slightly in 2013,” Minister for Finance Michael Noonan said.
“By contrast, labour market conditions are encouraging. Employment data is a reliable indicator of underlying developments in the economy and figures released a fortnight ago show employment growth of 3.3 per cent year-on-year in the fourth quarter of 2013.”
Much of Ireland’s problems last year stemmed from the expiry of patents in the key pharmaceutical sector, which depressed merchandise exports overall.
However,services exports remained resilient and were 7.1 per cent higher year-on-year in the fourth quarter.
At face value, the 0.3 per cent fall in GDP in 2013 indicates that the Irish economy was back in recession. However, GNP, excluding multinational sector profits, was up 3.4 per cent.
The ECB may wipe out a large part of the Irish Economy
Economist Morgan Kelly’s warning that the European Central Bank is planning a “clean-up” of Irish banks will be taken seriously by government, Minister for Finance Michael Noonan has said.
Economist Morgan Kelly
In a lecture at University College Dublin, Prof Kelly said a clean up of SME bank loans by the European Central Bank may lead to large section of economy being “wiped out”.
Prof Kelly, who was the first economist to predict the likely scale of the Irish banking collapse, said the “real crisis” for the Irish economy may not yet have happened.
Irish Property-Dublin Rises up as the rest keep falling.
The outlook for property prices in Ireland is starting to improve three new surveys show – with Dublin leading the way.
One survey, from property website Daft.ie says Dublin property prices in Dublin rose 5.3% year-on-year with prices in the south now up by 12% in the first six months of the year.
Meanwhile, the latest figures from the Central Statistics Office (CSO) show prices have fallen 1.1% in the last year across the country but have risen in Dublin by 1.3%.
Dublin City
Another report from website MyHome.ie says asking prices in Dublin have risen for the first time since 2007, up 1% on a year ago.
Economist Ronan Lyons, of Daft, says the Dublin market is surging ahead of the rest of the country.
“This is certainly the first time such rapid growth in asking prices has been recorded anywhere in the country for almost six years. The underlying cause is a lack of supply in the capital, while demand has steadily been rising.”
Compare the latest figures with the decline of 15.3% in the 12 months to May 2012 reported by the CSO and it is plain to see how much the market has improved. The increase follows a larger 0.8% rise in April.
In Dublin, residential property prices grew 0.5% in May. House prices grew 0.5%, up 1.3% higher compared to a year earlier and apartment prices in the city were 1.2% lower on May 2012. The apartment figures are based on low volumes and so are open to greater volatility.
The price of residential properties in the rest of Ireland grew by 0.1% in May, the same rate as May last year. Prices were 2.8% lower than in May 2012.
House prices still have a long way to go to reach the highs of 2007 and Dublin prices are 55% lower than at their peak.
The fall in the price of residential properties in the Rest of Ireland is 48%. Overall, the national index is 50% lower than its highest level in 2007.
The figures from Daft show the fastest price rise since the first three months of 2007, just before the property market crashed.
Although prices outside Dublin are falling – 9% lower than this time last year – the rate of decline has slowed sharply from an average of 15% in 2012.
The average property price is €193,000 and the supply of properties for sale is now at its lowest level since the middle of 2007.
Car Sales Boost Irish Retail Sales
New figures from the Central Statistics Office show a rise in the volume of retail sales in January, on the back of strong car sales.
The CSO said that the volume of retail sales rose by 2.3% in January compared to December with car sales growing by 6.3%. On an annual basis, retail sales rose by 8.9% - the biggest yearly rise since May 2005.
But when motor trades are excluded, the volume of retail sales fell by 1% in January from December, while there was an increase of 2.7% in the annual figures.
Among the other sectors recording an increase in sales was the furniture and lighting sector, with sales there up 0.8%, while other retail sales rose 1.5%.
But sales in department stores fell by 4.6%, while pharmaceuticals, medical and cosmetic sales were down 4.1% and books, newspapers and stationary decreased by 3.7%.
The CSO said that the value of retail sales rose by 1.8% in January compared to the previous month, while there was an annual increase of 6.9% when compared with January 2013.
When car sales are excluded, the CSO said there was a monthly fall of 0.3% in the value of retail sales and an annual increase of 0.9%.
"Although there is still a general air of caution among consumers, there does seem to be a view that the worst is over," according to economist Alan McQuaid of Merrion Stockbrokers.
"A key issue going forward will be the state of the labour market, and the signs are encouraging on this front as we’ve seen with the most recent official employment data and the Live Register in recent months."
However, Mr McQuaid cautioned that the continued decline in disposable incomes as well as an increasing tax bill could weigh negatively on consumer spending in the coming months.
Conall Mac Coille of Davy echoed this sentiment and said that, car sales aside, much of the annual increase could be attributed to a reduction in saving.
However he said Davy anticipated a 1.5% increase in consumer spending this year, with exceptionally strong labour market data and spending on car sales potentially pushing that higher.
Irish Central Bank to Crack down on Small Firms
The Central Bank plans to use disciplinary actions against smaller firms that get caught breaching finance rules to demonstrate its seriousness as a regulator.
It says resources have been specifically allocated for enforcement actions in relation to smaller firms, which have less day-to-day contact with the regulator.
"Where breaches by small firms are discovered, we will use enforcement as a reminder that the regulatory rule book is mandatory, and non-compliance is regarded as serious.
The approach "promotes compliance through deterrence", the statement said.
Patrick Honohan, President of the Irish Central Bank
The Probability Risk and Impact System (PRISM) regime used by the bank means most of its resources are focused on supervising the biggest and most systemically important finance firms – including the main banks.
As a result, smaller "low impact" firms are subject to less heavy touch control.
Last year, the Central Bank levied €6.348m of fines and settled 16 enforcement actions against regulated firms.
Yesterday, it set out enforcement priorities for this year.
They include compliance with money-laundering rules and so-called "fitness and probity" regulation setting out standards for staff in the finance sector.
For the banks and credit unions the focus includes compliance with prudential requirements and having adequate systems and controls in place.
Markets supervision will include a focus on large exposures to risk and compliance with international business rules.
On the consumer side the focus will include enforcing compliance with the Code of Conduct for Mortgage Arrears, standards for smaller entities such as debt management firms and a focus on professional indemnity insurance.
The Central Bank also published a programme of what it called "themed reviews and inspections" for the year.
It includes a focus on the fund administration sector, which is a large employer here, heavily focused on the Irish financial services sector (IFSC) in Dublin.
Reviews will also look at advertising of financial products, levels of compliance with rules for lending to small and medium enterprises (SMEs), and publication of information on fees and charges.
The Irish construction industry is facing a skills storage which will hinder its return to growth
New research from the Society of Chartered Surveyors (SCSI) Ireland finds that there will be a growth in construction driven by the private commercial and residential sectors. Read the full Report
Research findings come with a warning that the industry could face a skills and employment shortage in the near future.
It is reported that construction output will increase by 30% by 2018, which could lead to the creation of over 30,000 construction jobs. This will bring total employment to the sector of 178,000.
The report states that this is only possible if barriers to development – such as the skills shortage – can be overcome.
Micheál O'Connor, President of the SCSI
Micheál O'Connor, President of the SCSI, pointed out that while the growth figures may sound considerable, the volume of construction growth will still only reach 7.4% of projected GNP by 2018.
Output in 2018 is expected to be below 2009 output levels, and still a long way short of the optimum level of 12 per cent of GNP which is seen as the European norm, he said.
The industry has contracted enormously from output levels of around €34 billion in 2007 to around €8.8 billion last year, according to O'Conner, who recommends that the government act on three key issues:
“Firstly the recovery is Dublin led with limited signs of recovery in many parts of the country. Secondly the lack of availability of finance for development, for mortgages and in public sector construction is seen as a key barrier to growth potential. And thirdly the employment and skills shortages which will and are arising out of the recovery need to be addressed at a national level,” O'Connor said.
The report, published today, finds that the amount of houses being constructed in considerably less than what it required. In 2013, just 8,301 residential units were completed, while in 2006 it was 89,000.
The ESRI estimates that between 10,00 and 12,000 new houses are needed this year (2014) and next year (2015, after which time, the need will double to between 20,000 and 25,000.
Availability of finance is the big challenge. Almost one-third of the SCSI members surveyed as part of the research said the availability of finance for both developers and buyers is seen as the primary challenge facing the residential construction sector over the next three years. Stakeholders interviewed in the course of the research said development levies, zoning and the need to move to lower density were all seen as barriers to development.
Ireland technically back in recession but GNP pushed them through.
The Irish economy unexpectedly shrank last year on the back of a sharp fall-off in net exports linked to the so-called pharma patent cliff.
Preliminary figures published today by the Central Statistics Office (CSO) showed gross domestic product (GDP) contracted by 0.3 per cent in 2013.
Economists polled by Reuters had expected full-year growth of 0.3 per cent.
Gross national product (GNP), which provides a better picture of domestic activity as it excludes the profit flows of multinationals, increased for the second successive year, growing by 3.4 per cent.
The latest quarterly accounts indicated import growth outpaced exports during 2013, a reversal in the trend of recent years, resulting in a €1.02 billion decline in net exports.
Despite the pick-up in employment in the latter half of the year, personal consumption, which accounts for two thirds of domestic demand, fell 1.1 per cent.
The CSO’s figures also revealed GDP contracted by a worse-than-expected 2.3 per cent in the fourth quarter compared with the previous quarter.
This was driven in the main by 10.5 per cent decline in net exports and a 4.7 per cent drop in industrial output.
Fourth quarter GNP rose by 0.2 per cent on the previous quarter.
“Today’s numbers show that measured GDP in Ireland fell slightly in 2013,” Minister for Finance Michael Noonan said.
“By contrast, labour market conditions are encouraging. Employment data is a reliable indicator of underlying developments in the economy and figures released a fortnight ago show employment growth of 3.3 per cent year-on-year in the fourth quarter of 2013.”
Much of Ireland’s problems last year stemmed from the expiry of patents in the key pharmaceutical sector, which depressed merchandise exports overall.
However,services exports remained resilient and were 7.1 per cent higher year-on-year in the fourth quarter.
At face value, the 0.3 per cent fall in GDP in 2013 indicates that the Irish economy was back in recession. However, GNP, excluding multinational sector profits, was up 3.4 per cent.
The ECB may wipe out a large part of the Irish Economy
Economist Morgan Kelly’s warning that the European Central Bank is planning a “clean-up” of Irish banks will be taken seriously by government, Minister for Finance Michael Noonan has said.
Economist Morgan Kelly
In a lecture at University College Dublin, Prof Kelly said a clean up of SME bank loans by the European Central Bank may lead to large section of economy being “wiped out”.
Prof Kelly, who was the first economist to predict the likely scale of the Irish banking collapse, said the “real crisis” for the Irish economy may not yet have happened.
Irish Property-Dublin Rises up as the rest keep falling.
The outlook for property prices in Ireland is starting to improve three new surveys show – with Dublin leading the way.
One survey, from property website Daft.ie says Dublin property prices in Dublin rose 5.3% year-on-year with prices in the south now up by 12% in the first six months of the year.
Meanwhile, the latest figures from the Central Statistics Office (CSO) show prices have fallen 1.1% in the last year across the country but have risen in Dublin by 1.3%.
Dublin City
Another report from website MyHome.ie says asking prices in Dublin have risen for the first time since 2007, up 1% on a year ago.
Economist Ronan Lyons, of Daft, says the Dublin market is surging ahead of the rest of the country.
“This is certainly the first time such rapid growth in asking prices has been recorded anywhere in the country for almost six years. The underlying cause is a lack of supply in the capital, while demand has steadily been rising.”
Compare the latest figures with the decline of 15.3% in the 12 months to May 2012 reported by the CSO and it is plain to see how much the market has improved. The increase follows a larger 0.8% rise in April.
In Dublin, residential property prices grew 0.5% in May. House prices grew 0.5%, up 1.3% higher compared to a year earlier and apartment prices in the city were 1.2% lower on May 2012. The apartment figures are based on low volumes and so are open to greater volatility.
The price of residential properties in the rest of Ireland grew by 0.1% in May, the same rate as May last year. Prices were 2.8% lower than in May 2012.
House prices still have a long way to go to reach the highs of 2007 and Dublin prices are 55% lower than at their peak.
The fall in the price of residential properties in the Rest of Ireland is 48%. Overall, the national index is 50% lower than its highest level in 2007.
The figures from Daft show the fastest price rise since the first three months of 2007, just before the property market crashed.
Although prices outside Dublin are falling – 9% lower than this time last year – the rate of decline has slowed sharply from an average of 15% in 2012.
The average property price is €193,000 and the supply of properties for sale is now at its lowest level since the middle of 2007.
Car Sales Boost Irish Retail Sales
New figures from the Central Statistics Office show a rise in the volume of retail sales in January, on the back of strong car sales.
The CSO said that the volume of retail sales rose by 2.3% in January compared to December with car sales growing by 6.3%. On an annual basis, retail sales rose by 8.9% - the biggest yearly rise since May 2005.
But when motor trades are excluded, the volume of retail sales fell by 1% in January from December, while there was an increase of 2.7% in the annual figures.
Among the other sectors recording an increase in sales was the furniture and lighting sector, with sales there up 0.8%, while other retail sales rose 1.5%.
But sales in department stores fell by 4.6%, while pharmaceuticals, medical and cosmetic sales were down 4.1% and books, newspapers and stationary decreased by 3.7%.
The CSO said that the value of retail sales rose by 1.8% in January compared to the previous month, while there was an annual increase of 6.9% when compared with January 2013.
When car sales are excluded, the CSO said there was a monthly fall of 0.3% in the value of retail sales and an annual increase of 0.9%.
"Although there is still a general air of caution among consumers, there does seem to be a view that the worst is over," according to economist Alan McQuaid of Merrion Stockbrokers.
"A key issue going forward will be the state of the labour market, and the signs are encouraging on this front as we’ve seen with the most recent official employment data and the Live Register in recent months."
However, Mr McQuaid cautioned that the continued decline in disposable incomes as well as an increasing tax bill could weigh negatively on consumer spending in the coming months.
Conall Mac Coille of Davy echoed this sentiment and said that, car sales aside, much of the annual increase could be attributed to a reduction in saving.
However he said Davy anticipated a 1.5% increase in consumer spending this year, with exceptionally strong labour market data and spending on car sales potentially pushing that higher.
Irish Central Bank to Crack down on Small Firms
The Central Bank plans to use disciplinary actions against smaller firms that get caught breaching finance rules to demonstrate its seriousness as a regulator.
It says resources have been specifically allocated for enforcement actions in relation to smaller firms, which have less day-to-day contact with the regulator.
"Where breaches by small firms are discovered, we will use enforcement as a reminder that the regulatory rule book is mandatory, and non-compliance is regarded as serious.
The approach "promotes compliance through deterrence", the statement said.
Ireland technically back in recession but GNP pushed them through.
The Irish economy unexpectedly shrank last year on the back of a sharp fall-off in net exports linked to the so-called pharma patent cliff.
Preliminary figures published today by the Central Statistics Office (CSO) showed gross domestic product (GDP) contracted by 0.3 per cent in 2013.
Economists polled by Reuters had expected full-year growth of 0.3 per cent.
Gross national product (GNP), which provides a better picture of domestic activity as it excludes the profit flows of multinationals, increased for the second successive year, growing by 3.4 per cent.
The latest quarterly accounts indicated import growth outpaced exports during 2013, a reversal in the trend of recent years, resulting in a €1.02 billion decline in net exports.
Despite the pick-up in employment in the latter half of the year, personal consumption, which accounts for two thirds of domestic demand, fell 1.1 per cent.
The CSO’s figures also revealed GDP contracted by a worse-than-expected 2.3 per cent in the fourth quarter compared with the previous quarter.
This was driven in the main by 10.5 per cent decline in net exports and a 4.7 per cent drop in industrial output.
Fourth quarter GNP rose by 0.2 per cent on the previous quarter.
“Today’s numbers show that measured GDP in Ireland fell slightly in 2013,” Minister for Finance Michael Noonan said.
“By contrast, labour market conditions are encouraging. Employment data is a reliable indicator of underlying developments in the economy and figures released a fortnight ago show employment growth of 3.3 per cent year-on-year in the fourth quarter of 2013.”
Much of Ireland’s problems last year stemmed from the expiry of patents in the key pharmaceutical sector, which depressed merchandise exports overall.
However,services exports remained resilient and were 7.1 per cent higher year-on-year in the fourth quarter.
At face value, the 0.3 per cent fall in GDP in 2013 indicates that the Irish economy was back in recession. However, GNP, excluding multinational sector profits, was up 3.4 per cent.
The ECB may wipe out a large part of the Irish Economy
Economist Morgan Kelly’s warning that the European Central Bank is planning a “clean-up” of Irish banks will be taken seriously by government, Minister for Finance Michael Noonan has said.
Economist Morgan Kelly
In a lecture at University College Dublin, Prof Kelly said a clean up of SME bank loans by the European Central Bank may lead to large section of economy being “wiped out”.
Prof Kelly, who was the first economist to predict the likely scale of the Irish banking collapse, said the “real crisis” for the Irish economy may not yet have happened.
Irish Property-Dublin Rises up as the rest keep falling.
The outlook for property prices in Ireland is starting to improve three new surveys show – with Dublin leading the way.
One survey, from property website Daft.ie says Dublin property prices in Dublin rose 5.3% year-on-year with prices in the south now up by 12% in the first six months of the year.
Meanwhile, the latest figures from the Central Statistics Office (CSO) show prices have fallen 1.1% in the last year across the country but have risen in Dublin by 1.3%.
Ireland technically back in recession but GNP pushed them through.
The Irish economy unexpectedly shrank last year on the back of a sharp fall-off in net exports linked to the so-called pharma patent cliff.
Preliminary figures published today by the Central Statistics Office (CSO) showed gross domestic product (GDP) contracted by 0.3 per cent in 2013.
Economists polled by Reuters had expected full-year growth of 0.3 per cent.
Gross national product (GNP), which provides a better picture of domestic activity as it excludes the profit flows of multinationals, increased for the second successive year, growing by 3.4 per cent.
The latest quarterly accounts indicated import growth outpaced exports during 2013, a reversal in the trend of recent years, resulting in a €1.02 billion decline in net exports.
Despite the pick-up in employment in the latter half of the year, personal consumption, which accounts for two thirds of domestic demand, fell 1.1 per cent.
The CSO’s figures also revealed GDP contracted by a worse-than-expected 2.3 per cent in the fourth quarter compared with the previous quarter.
This was driven in the main by 10.5 per cent decline in net exports and a 4.7 per cent drop in industrial output.
Fourth quarter GNP rose by 0.2 per cent on the previous quarter.
“Today’s numbers show that measured GDP in Ireland fell slightly in 2013,” Minister for Finance Michael Noonan said.
“By contrast, labour market conditions are encouraging. Employment data is a reliable indicator of underlying developments in the economy and figures released a fortnight ago show employment growth of 3.3 per cent year-on-year in the fourth quarter of 2013.”
Much of Ireland’s problems last year stemmed from the expiry of patents in the key pharmaceutical sector, which depressed merchandise exports overall.
However,services exports remained resilient and were 7.1 per cent higher year-on-year in the fourth quarter.
At face value, the 0.3 per cent fall in GDP in 2013 indicates that the Irish economy was back in recession. However, GNP, excluding multinational sector profits, was up 3.4 per cent.
Ireland technically back in recession but GNP pushed them through.
The Irish economy unexpectedly shrank last year on the back of a sharp fall-off in net exports linked to the so-called pharma patent cliff.
Despite the pick-up in employment in the latter half of the year, personal consumption, which accounts for two thirds of domestic demand, fell 1.1 per cent.The ECB may wipe out a large part of the Irish Economy
Economist Morgan Kelly’s warning that the European Central Bank is planning a “clean-up” of Irish banks will be taken seriously by government, Minister for Finance Michael Noonan has said.
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| Economist Morgan Kelly |
Prof Kelly, who was the first economist to predict the likely scale of the Irish banking collapse, said the “real crisis” for the Irish economy may not yet have happened.
Irish Property-Dublin Rises up as the rest keep falling.
The outlook for property prices in Ireland is starting to improve three new surveys show – with Dublin leading the way.
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| Dublin City |
Another report from website MyHome.ie says asking prices in Dublin have risen for the first time since 2007, up 1% on a year ago.
Economist Ronan Lyons, of Daft, says the Dublin market is surging ahead of the rest of the country.
“This is certainly the first time such rapid growth in asking prices has been recorded anywhere in the country for almost six years. The underlying cause is a lack of supply in the capital, while demand has steadily been rising.”
Compare the latest figures with the decline of 15.3% in the 12 months to May 2012 reported by the CSO and it is plain to see how much the market has improved. The increase follows a larger 0.8% rise in April.
In Dublin, residential property prices grew 0.5% in May. House prices grew 0.5%, up 1.3% higher compared to a year earlier and apartment prices in the city were 1.2% lower on May 2012. The apartment figures are based on low volumes and so are open to greater volatility.
The price of residential properties in the rest of Ireland grew by 0.1% in May, the same rate as May last year. Prices were 2.8% lower than in May 2012.
House prices still have a long way to go to reach the highs of 2007 and Dublin prices are 55% lower than at their peak.
The fall in the price of residential properties in the Rest of Ireland is 48%. Overall, the national index is 50% lower than its highest level in 2007.
The figures from Daft show the fastest price rise since the first three months of 2007, just before the property market crashed.
Although prices outside Dublin are falling – 9% lower than this time last year – the rate of decline has slowed sharply from an average of 15% in 2012.
The average property price is €193,000 and the supply of properties for sale is now at its lowest level since the middle of 2007.
Car Sales Boost Irish Retail Sales
New figures from the Central Statistics Office show a rise in the volume of retail sales in January, on the back of strong car sales.
The CSO said that the volume of retail sales rose by 2.3% in January compared to December with car sales growing by 6.3%. On an annual basis, retail sales rose by 8.9% - the biggest yearly rise since May 2005.
But when motor trades are excluded, the volume of retail sales fell by 1% in January from December, while there was an increase of 2.7% in the annual figures.
Among the other sectors recording an increase in sales was the furniture and lighting sector, with sales there up 0.8%, while other retail sales rose 1.5%.
But sales in department stores fell by 4.6%, while pharmaceuticals, medical and cosmetic sales were down 4.1% and books, newspapers and stationary decreased by 3.7%.
The CSO said that the value of retail sales rose by 1.8% in January compared to the previous month, while there was an annual increase of 6.9% when compared with January 2013.
When car sales are excluded, the CSO said there was a monthly fall of 0.3% in the value of retail sales and an annual increase of 0.9%.
"Although there is still a general air of caution among consumers, there does seem to be a view that the worst is over," according to economist Alan McQuaid of Merrion Stockbrokers.
"A key issue going forward will be the state of the labour market, and the signs are encouraging on this front as we’ve seen with the most recent official employment data and the Live Register in recent months."
However, Mr McQuaid cautioned that the continued decline in disposable incomes as well as an increasing tax bill could weigh negatively on consumer spending in the coming months.
Conall Mac Coille of Davy echoed this sentiment and said that, car sales aside, much of the annual increase could be attributed to a reduction in saving.
However he said Davy anticipated a 1.5% increase in consumer spending this year, with exceptionally strong labour market data and spending on car sales potentially pushing that higher.
Irish Central Bank to Crack down on Small Firms
The Central Bank plans to use disciplinary actions against smaller firms that get caught breaching finance rules to demonstrate its seriousness as a regulator.
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| Patrick Honohan, President of the Irish Central Bank |
The Probability Risk and Impact System (PRISM) regime used by the bank means most of its resources are focused on supervising the biggest and most systemically important finance firms – including the main banks.
As a result, smaller "low impact" firms are subject to less heavy touch control.
Last year, the Central Bank levied €6.348m of fines and settled 16 enforcement actions against regulated firms.
Yesterday, it set out enforcement priorities for this year.
They include compliance with money-laundering rules and so-called "fitness and probity" regulation setting out standards for staff in the finance sector.
For the banks and credit unions the focus includes compliance with prudential requirements and having adequate systems and controls in place.
Markets supervision will include a focus on large exposures to risk and compliance with international business rules.
On the consumer side the focus will include enforcing compliance with the Code of Conduct for Mortgage Arrears, standards for smaller entities such as debt management firms and a focus on professional indemnity insurance.
The Central Bank also published a programme of what it called "themed reviews and inspections" for the year.
It includes a focus on the fund administration sector, which is a large employer here, heavily focused on the Irish financial services sector (IFSC) in Dublin.
Reviews will also look at advertising of financial products, levels of compliance with rules for lending to small and medium enterprises (SMEs), and publication of information on fees and charges.
The Irish construction industry is facing a skills storage which will hinder its return to growth
New research from the Society of Chartered Surveyors (SCSI) Ireland finds that there will be a growth in construction driven by the private commercial and residential sectors. Read the full Report
Research findings come with a warning that the industry could face a skills and employment shortage in the near future.
It is reported that construction output will increase by 30% by 2018, which could lead to the creation of over 30,000 construction jobs. This will bring total employment to the sector of 178,000.
The report states that this is only possible if barriers to development – such as the skills shortage – can be overcome.
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| Micheál O'Connor, President of the SCSI |
Micheál O'Connor, President of the SCSI, pointed out that while the growth figures may sound considerable, the volume of construction growth will still only reach 7.4% of projected GNP by 2018.
Output in 2018 is expected to be below 2009 output levels, and still a long way short of the optimum level of 12 per cent of GNP which is seen as the European norm, he said.
The industry has contracted enormously from output levels of around €34 billion in 2007 to around €8.8 billion last year, according to O'Conner, who recommends that the government act on three key issues:
“Firstly the recovery is Dublin led with limited signs of recovery in many parts of the country. Secondly the lack of availability of finance for development, for mortgages and in public sector construction is seen as a key barrier to growth potential. And thirdly the employment and skills shortages which will and are arising out of the recovery need to be addressed at a national level,” O'Connor said.
The report, published today, finds that the amount of houses being constructed in considerably less than what it required. In 2013, just 8,301 residential units were completed, while in 2006 it was 89,000.
The ESRI estimates that between 10,00 and 12,000 new houses are needed this year (2014) and next year (2015, after which time, the need will double to between 20,000 and 25,000.
Availability of finance is the big challenge. Almost one-third of the SCSI members surveyed as part of the research said the availability of finance for both developers and buyers is seen as the primary challenge facing the residential construction sector over the next three years. Stakeholders interviewed in the course of the research said development levies, zoning and the need to move to lower density were all seen as barriers to development.
Bonds are much more fun than loans
Irish corporate borrowers tapped the bond market for €5.5bn of new debt last year,15pc more than 2012.
The increase reflects a strong appetite among bond investors but also banks' reduced role in the lending market, according to rating agency Fitch.
As a class, corporate borrowers exclude the likes of the State and the banks but include trading businesses like Eircom, Ardagh Group and Bord Gais which all tapped the market last year.
Irish corporates raised €5.52bn on the bond market last year, up from €4.793bn in 2012, according to Fitch which cited data from Dealogic.
In Spain the numbers are even more stark, there corporate bond issuance surged by 45pc in 2013, according to the same research.
Across the euro area periphery of Greece, Ireland, Italy, Portugal and Spain corporate bond deals were up 22%
However in Europe as a whole, corporates raised a total of €446 bn in bonds in 2013, down 6pc on the prior year.
In the peripheral countries, bond deals accounted for 43pc of all new debt raised by corporates in 2013, a market traditionally dominated by the banks.
Stress test of the banks
One factor in that may be the euro-wide stress testing of banks due to take place in the second half of this year.
"ECB stress tests will continue to suppress bank risk appetite for lending," the Fitch agency said.
Investors' hunt for yields in 2013 was also a big factor in the markets. For example Eircom was able to borrow €350m on the bond market by offering a yield or interest rate of 9.25%.
The deal turned heads because it came within a year of the company entering examinership and "burning" previous bondholders.
Unlike bank loans bond debt is generally non-amortising – meaning the debt is repaid on an interest-only basis with a single repayment of principal at the end of the life of the deal.
In many cases it makes bond debt less costly to service on an annual basis than bank loans even if the official interest rate is higher.
Facebook- The biggest renter in Ireland
Prime office rents in Dublin rose by 15% last year and are likely to rise by a further 10% this year, according to commercial property specialist HWBC.Read the Full Report
In its annual office market review, the company notes that there was a 20% increase in the amount of office space let in Dublin last year.
The biggest deal in the Dublin market last year was Facebook’s move to a 11,300 sqm office in Grand Canal Square.
The second largest deal was Deutsche Bank’s move to a 10,100 sqm office in the city’s East Point, while trading and derivatives firm SIG’s deal to move into International House in the IFSC was third.
In all, multinationals expanding or setting up in Ireland accounted for seven of the top ten office deals in Dublin last year.
High quality offices accounted for the majority of the up take last year, according to HWBC, while just 3% came from so-called Grade C buildings.
Facebook- The biggest renter in Ireland
Prime office rents in Dublin rose by 15% last year and are likely to rise by a further 10% this year, according to commercial property specialist HWBC.Read the Full Report
Ireland and UK first joint trade mission !
Ireland and the UK will undertake their first ever joint trade mission at the Singapore Airshow - Asia's largest airshow.
The trade mission is part of a programme of cooperation to strengthen relations over the next decade led by UK prime minister David Cameron and Irish Taoiseach Enda Kenny.
It is being headed up by Ireland's jobs minister Richard Bruton, UK transport minister Stephen Hammond and Northern Ireland enterprise minister Arlene Foster with support from UK Trade & Investment (UKTI),Enterprise Ireland and Invest Northern Ireland.
Bruton said the mission was an important part of a “wider programme of cooperation between Ireland and the UK”.
"The aerospace industry is one of Ireland's most valuable and technically advanced industries. Today, Ireland is recognised as a leading location for aviation, MRO, technology, engineering and aviation finance.
"This first joint mission has attracted an impressive list of companies from Ireland, Northern Ireland and the UK that will demonstrate our considerable combined strengths in the aerospace sector at Asia's largest air show."
Ireland and UK first joint trade mission !
Ireland and the UK will undertake their first ever joint trade mission at the Singapore Airshow - Asia's largest airshow.
The trade mission is part of a programme of cooperation to strengthen relations over the next decade led by UK prime minister David Cameron and Irish Taoiseach Enda Kenny.It is being headed up by Ireland's jobs minister Richard Bruton, UK transport minister Stephen Hammond and Northern Ireland enterprise minister Arlene Foster with support from UK Trade & Investment (UKTI),Enterprise Ireland and Invest Northern Ireland.
Rents rise and not just in Dublin
Rents are on the rise and not just in Dublin, according to Daft.ie’s latest report on the rental sector which shows year-on-year increases in all cities apart from Waterford in the last quarter of 2013.
The increase in the average rent nationwide rose to 7.1 per cent in the final quarter of 2013, compared to a 2.2 per cent rise a year previously, according to the quarterlyDaft.ie Rental Report.
The average advertised rent, which the property website bases on a sample of over 10,000 property lettings nationwide, stands at €865, compared to €790 two years ago.
The increase in rents is mainly being driven by inflation in Dublin where rents rose by over 11 per cent in the past year: they are now almost 18 per cent higher than at their lowest point in mid-2011.
Rents in Dublin are now effectively at the same level as early 2006, when the average Dublin rent stood at €1,250. However, they are still 15 per cent below peak prices witnessed in mid-2007.
Rents in most other cities have also risen in the past year: they are up by over 4 per cent in Cork and Galway while Limerick rents have risen by 3.6 per cent.
The exception is Waterford city, where rents continue to fall at 0.6 per cent year-on-year.
Irish Unemployment down
On a seasonally adjusted basis the Live Register total recorded a monthly decrease of 2,300 in January 2014, reducing the seasonally adjusted total to 400,700.
The standardised unemployment rate (SUR) in January 2014 was 12.3%, down from 12.4% in December 2013.
Irish Unemployment 13-14
Live Register duration of continuous registration
Male
Female
Part Time and Casual workers
Casual and Part Time
Irish government tax take down-they blame SEPA
The Irish Government’s first set of exchequer returns for 2014 are sharply down on last year because of the switchover to the new European electronic payments system.
The latest returns showed the State collected nearly €650 million less than expected in tax last month.
The anomaly was blamed on the introduction of SEPA (Single Euro Payments Area) system which slowed down the Revenue Commissioners’ collection of VAT, corporation tax and employers’ PAYE and PRSI.
Instead of payments being processed within two or three banking days it will now take seven banking days.
The department insisted the fall-off in tax was a “ technical timing issue” and did not alter the tax forecast for the year.
The figures showed the exchequer deficit at the end of January stood at €1.14 billion, compared with a surplus of €704 million at the same stage last year.
Net voted expenditure for January was €4.1 billion, representing a year-on-year increase of 3.8 per cent or €152 million.
January 2013
January 2014
Overall Tax Revenue
€3.7 billion €3.1 billion
Income Tax
€1.38 billion
€1.2 billion
Vat receipts
€1.74 billion
€1.37 billion
Corporation tax
€11 million
€7 million
Excise duties
€318 million
€342 million
Rents rise and not just in Dublin
Rents are on the rise and not just in Dublin, according to Daft.ie’s latest report on the rental sector which shows year-on-year increases in all cities apart from Waterford in the last quarter of 2013.
The increase in the average rent nationwide rose to 7.1 per cent in the final quarter of 2013, compared to a 2.2 per cent rise a year previously, according to the quarterlyDaft.ie Rental Report.
The average advertised rent, which the property website bases on a sample of over 10,000 property lettings nationwide, stands at €865, compared to €790 two years ago.
The increase in rents is mainly being driven by inflation in Dublin where rents rose by over 11 per cent in the past year: they are now almost 18 per cent higher than at their lowest point in mid-2011.
Rents in Dublin are now effectively at the same level as early 2006, when the average Dublin rent stood at €1,250. However, they are still 15 per cent below peak prices witnessed in mid-2007.
Rents in most other cities have also risen in the past year: they are up by over 4 per cent in Cork and Galway while Limerick rents have risen by 3.6 per cent.
The exception is Waterford city, where rents continue to fall at 0.6 per cent year-on-year.
Irish Unemployment down
On a seasonally adjusted basis the Live Register total recorded a monthly decrease of 2,300 in January 2014, reducing the seasonally adjusted total to 400,700.
The standardised unemployment rate (SUR) in January 2014 was 12.3%, down from 12.4% in December 2013.
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| Irish Unemployment 13-14 |
Live Register duration of continuous registration
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| Male |
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| Female |
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| Casual and Part Time |
Irish government tax take down-they blame SEPA
The Irish Government’s first set of exchequer returns for 2014 are sharply down on last year because of the switchover to the new European electronic payments system.
The latest returns showed the State collected nearly €650 million less than expected in tax last month.
The anomaly was blamed on the introduction of SEPA (Single Euro Payments Area) system which slowed down the Revenue Commissioners’ collection of VAT, corporation tax and employers’ PAYE and PRSI.
Instead of payments being processed within two or three banking days it will now take seven banking days.
The department insisted the fall-off in tax was a “ technical timing issue” and did not alter the tax forecast for the year.
The figures showed the exchequer deficit at the end of January stood at €1.14 billion, compared with a surplus of €704 million at the same stage last year.
Net voted expenditure for January was €4.1 billion, representing a year-on-year increase of 3.8 per cent or €152 million.
January 2013
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January 2014
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Overall Tax Revenue
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€3.7 billion
| €3.1 billion |
Income Tax
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€1.38 billion
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€1.2 billion
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Vat receipts
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€1.74 billion
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€1.37 billion
|
Corporation tax
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€11 million
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€7 million
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Excise duties
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€318 million
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€342 million
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Irelands growth modest but further looks bright
According to the Central Bank of Ireland's Quarterly Bulletin 1 2014.
Ireland has emerged from the EU/IMF Programme against a background of increased market confidence in the outlook for the country’s economic performance and policy prospects.
This has been reflected in an improvement in the market’s assessment of Ireland’s credit worthiness, helping the Sovereign and domestic banks to regain access to market funding at, increasingly, more favourable rates.
General Government Deficit is on track to fall below 3 per cent of GDP by 2015 once there is continued adherence to the policies that were in place during the Programme.
This is also true for returning the banking system to a position where it can support the economy with adequate lending, and getting the rate of employment well up from the low level to which it had fallen in the crisis.
The public finances, the latest estimates suggest that the General Government Deficit for 2013 should come in below the 7.5 per cent of GDP target under the Excessive Deficit Procedure.
Projections indicate that the debt-to-GDP ratio has peaked and at a slightly lower level than previously expected.
The Irish economy is forecast to grow by 2.1 per cent this year as consumer spending and business investment increases.
In the banking sector, while liquidity and funding conditions have improved, the key issues revolve around the need for further progress in dealing with the resolution of impaired loan.
In accordance with the mortgage arrears resolution strategy and targets, the Central Bank has continued to require the banks to accelerate their work to ensure the conclusion of sustainable long-term arrangements.
The Bank is also monitoring ongoing steps to cure and resolve legacy debt problems of small firms.
Moderate wage growth and reductions to the cost base of the economy have helped restore some of the competitiveness lost during the boom.
The most recent data indicate that employment has grown strongly over the past year
Dublin Houses rise as the rest of the country watch
In the year to December, Irish residential property prices at a national level, increased by 6.4%. This compares with an increase of 5.6% in November and a decrease of 4.5% recorded in the twelve months to December 2012. .
Residential property prices grew by 0.3% in the month of December. This compares with an increase of 0.6% recorded in November and a decrease of 0.5% recorded in December of last year.
In Dublin residential property prices grew by 0.3% in December and were 15.7% higher than a year ago. Dublin house prices grew by 0.1% in the month and were 15.3% higher compared to a year earlier. Dublin apartment prices were 20.8% higher when compared with the same month of 2012. However, it should be noted that the sub-indices for apartments are based on low volumes of observed transactions and consequently suffer from greater volatility than other series.
The price of residential properties in the Rest of Ireland (i.e. excluding Dublin) rose by 0.1% in December compared with no change in December of last year. Prices were 0.4% lower than in December 2012.
Overall Decline
House prices in Dublin are 47.4% lower than at their highest level in early 2007. Apartments in Dublin are 54.5% lower than they were in February 2007. Residential property prices in Dublin are 49.1% lower than at their highest level in February 2007. The fall in the price of residential properties in the Rest of Ireland is somewhat lower at 46.8%. Overall, the national index is 46.4% lower than its highest level in 2007.
Report tells Ireland what it knows and that they are cheaper now too!
Ireland was the only country in the EU to experience a decrease in inflation between 2008 and 2012 but prices remain high by EU standards, according to the report Measuring Ireland’s Progress 2012 , published by the CSO today.
Ireland was the fifth most expensive EU state in 2012. However, this represents a considerable improvement on 2008 when Irish prices were the second highest in the EU, at 30% above the EU average.
1st
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Luxembourg
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2nd
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Finland
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3rd
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Sweden,
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4th
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Denmark
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5th
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Ireland
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The public balance deficit was the third highest of any EU member state at just over 8% of GDP,
Government debt increased to 117.4% of GDP, having been at only 44.2% of GDP in 2008.
The number of new houses and apartments, after peaking at almost 90,000 in 2006, collapsed to 8,488 in 2012, below the level in 1970.
Ireland’s employment rate was the fifth lowest in the EU, and its unemployment rate was the fifth highest in the EU.
People think the houses will rise but have they the money to buy them?
A new index from AIB/ESRI is a measure of consumer perceptions in relation to the Irish housing market as well as their house price expectations.
The survey of over 800 consumers was conducted by the ESRI between July and December 2013.
A significant shift in consumer expectations in relation to house prices from July to December 2013. Those consumers surveyed who believe house prices will be higher in 12 months’ time increased from 29.2% to 46.3%
The main reasons for not buying noted by consumers surveyed included that they are ‘satisfied with their present dwelling’ (54.6%), followed by ‘cannot afford it’ (22%)The main risks to buying noted in December by consumers was ‘worries about future income’ or ‘affordability concerns’ (58.4%), followed by ‘fears about increasing interest rates’ (17.7%). Also cited were ‘changes in family circumstances’ (16.3%), as was ‘possible changes in house prices’ (6.5%)
Overall, consumers expect that house prices will increase by 2.1% over the next 12 months. Dublin-based consumers expect higher house price growth, with growth of 3.6% expected over the next 12 months.
Ireland no longer Junk
The credit rating of the Irish Government has been raised to investment grade by Moody’s the most influential of the international credit rating agencies.
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| Moody's the rating agency |
In a statement tonight, Moody’s said that it was upgrading Ireland’s credit rating by one notch to Baa3, the lowest investment grade.
A radical report by an expert group on entrepreneurship going around the Irish media, has recommended a flat tax on all income of 15pc to 20pc in a long-term strategy to attract corporations, immigrant business people and keep wealthy Irish in the country.
The low flat rate of tax would be on all income and would also be aimed at eliminating evasion.
"High income tax rates results in fewer jobs, results in more people on social welfare, and results in a dying economy," the report by the Entrepreneurship Forum says.
 |
| Sean O'Sullivan |
Chaired by entrepreneur and venture capitalist Sean O'Sullivan, the forum makes 69 recommendations about improving the number of jobs created by entrepreneurs in the country, including:
- Capping USC at €100,000 for self-employed just as it is for employees.
- Let women share maternity leave with partners.
- Tax breaks for company-to-company lending to bypass banks.
- Tight rules on banks using personal guarantees in lending.
- Remove any barriers to bringing in international banks to the gaps in Irish business lending.
- Attract foreign direct investment from start-ups, rather than just established multinationals.
- Make Ireland the European trade hub for China.
- Speed up grants for people coming off the dole to start up their own company.
The forum was set up by Jobs Minister Richard Bruton, who will bring the report to Cabinet in the coming weeks and is expected to act on many of the recommendations.
Scramble to Buy Irish Government Bonds
Investors were eager today to buy Irish government debt in the countries first auction of sovereign debt since the end of the bailout.
Some € 3.75 billion worth of 10 year bonds were offered on the global money markets with orders worth €14 billion euro (£11.6 billion) coming in according to the National Treasury Management Agency (NTMA).
This sees Irelands bond yields at their lowest since 2006, showing that the State will make a successful return to debt markets.
The NTMA has also appointed Barclays, Citi, Danske Bank, Davy, Deutsche Bank and Morgan Stanley as joint lead managers for a 10-year “euro benchmark transaction”.
‘‘The deal is likely to be well over subscribed and will mark an important milestone for Ireland and, indeed, the euro area,’’ said Dermot O’Leary, chief economist at Goodbody Stockbrokers in Dublin.
‘‘From a funding point of view, Ireland is already in a comfortable position, but the sale today is more about Ireland’s return to normality.”
Irish Debt Buyback as lower rate is forecasted.
Today the National Treasury Management Agency (NTMA) has completed a buyback of €4.1 billion of the 4 per cent Treasury bond.
On foot of the buyback this amount will be cancelled and the nominal outstanding will decline from €6.848 billion to €2.746 billion which had been €12 billion outstanding at its peak an NTMA spokesman said.
The remaining €2.746 billion will be redeemed on 15 January
The 4.1 billion euro buyback has no impact on the funding the Irish Government has raised to meet its needs into the first quarter of 2015, but was purely a matter of timing, a NTMA spokesman said in a statement.
Finance Minister Michael Noonan said earlier on today that the buyback would likely mean Ireland's government debt would peak at 122 percent of gross domestic product (GDP) this year, rather than the 124 percent previously forecast.
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| Finance Minister Michael Noonan |
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