Morning business news - October 8

Monday 08 October 2012 11.36
Morning business news with Brian Finn
Morning business news with Brian Finn

TECH SECTOR SHOWING BUOYANT GROWTH - Over 4,500 jobs were created in the tech sector here in the first nine months of the year. Another 5,000 positions remain to be filled, 1,500 of which are to be found in the indigenous Irish tech sector, according to Anna Scally, tax partner with KPMG.

KPMG has published a guide to growing a start-up tech company in Ireland in advance of Innovation Week and the Dublin Web summit which takes place next week. 

"Ireland has a vibrant, educated workforce, we provide a significant gateway to a very big market in Europe, we have a very good corporate tax rate and we have a pro-business environment," Anna Scally says.

From a tax point of view, it is favourable to set up a tech company. "Companies that start up in Ireland may be exempt from corporate tax for the first three years. If you start up a company, profits of up to €320,000 may be exempt from tax," Ms Scally points out. 

She also says that research and development tax exemptions could benefit companies engaging in innovative work. From a funding point of view, Anna Scally says there has never been as much seed and venture capital available to risky, tech start ups as there is now. Enterprise Ireland also has a dedicated funding initiative for the hi-tech sector and entrepreneurs and business angels continue to be a significant source of funding.

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MORNING BRIEFS - Oil prices fell marginally in September, the latest Bord Gáis Energy Index tells us this morning. The index now stands at 150 - a 1% fall in the month. However, it is up 11% since September last year. The price of Brent crude has jumped by $23 since June - a 26% hike - and remains at historic highs.

*** There was a further fall in activity in the construction sector last month as new business continued to decrease. That in turn lead to a reduction in employment and purchasing activity, according to the latest Construction PMI from Ulster Bank. The Purchasing Managers Index measures activity in a particular sector with anything above 50 signalling growth in that area. September's figure came in at 42.9 - up from 40.7 in August. While the reduction in activity was not as acute last month, it was still a sharp decline, the bank noted.

*** The World Bank has cut its economic growth forecasts for East Asia and the Pacific region. It says there's a risk the slowdown in China could worsen and last longer than many analysts had forecast. However, the bank still expects China to have a soft landing, and it has revised its growth forecast for this year to 7.7% with 8.1% for next year.

*** Asian markets dropped overnight ahead of that meeting of European finance ministers today and the long awaited launch of the ESM. Shares in Europe closed in positive territory on Friday as equities and the single currency continued to benefit from Mario Draghi's comments last week that the OMT bond buying programme was ready to go and it was up to countries to apply for assistance. A clear invitation to Spain, perhaps, but Madrid appears far from ready to make any such application. Market performance in Europe for the next while will likely be closely correlated to Spain's moves.