Morning business news - February 20Wednesday 20 February 2013 10.53
DECLINE IN CONSTRUCTION SECTOR SLOWS - The reduction we have witnessed in the construction sector continues and following a fall in activity of 9% last year, a smaller 3% decline is expected this year. That is according to quantity surveyors Davis Langdon, who say contractors are feeling the most pressure as they rely on "live" construction projects. The surveyors' annual review says, that as a consequence, contractors are being more selective about what projects they tender for because of a lack of resources and high tendering costs. The review says there were 4,000 housing starts and 8,000 completions during 2012 - less than a tenth of the annual total at the peak of the market.
Davis Langdon's Ireland Director, Paul Mitchell, says that over 80,000 housing units were completed at the height of the building boom and that figure has now fall to 10% of that total. He says that the building industry now contributes about €7.5 billion to the economy, but for the industry to be naturally sustainable it should be contributing about €15 billion. The industry has also seen construction jobs cut by about two thirds. Mr Mitchell says the country is now seeing some house shortages in some areas of the bigger cities, adding that some ageing stock needs to be rejuvenated.
The Davis Langdon review also notes the big fall in numbers taking construction related courses at third level institutions, saying that the numbers graduating will reduce to a trickle in two or three years time. Mr Mitchell says it is important that the industry addresses this issue so as to avoid a shortage in such trades as engineers and architects when the industry does pick up. He says that after going through five of six years of pain, the Irish construction industry is looking at signs of improvement.
MORNING BRIEFS - A big employer in Ireland, computer maker Dell has reported quarterly profits and revenues ahead of expectations. Last night's quarterly results could be its last set of results as a public company. The world's third biggest PC maker said net profit in the last three months of its financial year fell 31% to $530m, compared with the same period a year ago. Revenues were hurt by a shrinking consumer business. Founder Michael Dell has offered to buy the business for $24.4 billion as the firm struggles to compete with cheaper Asian rivals, as well as the boom in smartphones and tablet computers, and the firm has focused more on corporate needs and less on the home consumer. Dell first opened a manufacturing centre in Ireland in 1990 in Limerick to serve Africa, Europe and the Middle East. Restructuring in recent years has led to a reduction in its presence in Ireland, but it still employs about 2,000 people.
*** Canadian insurer - Great West Lifeco - bought the State-owned Irish Life for €1.3 billion yesterday. The Winnipeg-based insurer already operates the biggest Canadian-owned business in Ireland, Canada Life. Great-West plans to merge Irish Life with Canada Life and any job losses as a result of the takeover are expected to be achieved through voluntary redundancy and natural turnover among the companies' combined 2,600 employees. Great-West is controlled by Power Corp, owned by the Montreal-based Desmarais family. Its chief executive Paul Desmarais is the fourth wealthiest person in Canada and 235th in the world. He is active in the fields of mass media, pulp and paper and financial services.