Morning business news - April 2

Tuesday 02 April 2013 11.31
Morning business news with Brian Finn
Morning business news with Brian Finn

Activity in the Irish manufacturing sector contracted for the first time in 13 months during March, according to the latest Manufacturing PMIs from NCB.

The headline PMI reading stood at 48.6 - anything under 50 signals contraction.

New export orders fell into negative territory during March, with the sharpest rate of contraction since August 2009.

The decline in the export sector is one of the alarm bells being sounded by the business group, ISME in its first quarterly look at the new year.

Mark Fielding, CEO of ISME said it was a mixture of currency issues and the triple-dip recession in the UK.

"There's also been a reduction of exports into the US. All have come at the wrong time for the SME sector in the last three months."

Mark Fielding said all the indicators in its report, bar the exports, looked positive. Most were at a five year high, he said.

However, he pointed out that consumer confidence was being influenced by economic uncertainty and it was the biggest concern facing SMEs.

"We'll have that until we get job creation. No point talking about a jobs plan until costs are addressed. One of the biggest costs we have are energy prices. We're still the second highest in Europe. The government needs to act on everything from energy to CP2. If we don't bring down costs, we won't create the jobs."

MORNING BRIEFS - Two reports on the property market point to broadly similar outcomes - a two tier property market of sorts with the capital recording gains and the rest of the country declining, but stabilising in parts.

The report from the website Daft.ie says that asking prices in the capital in a 12 month period to end March increased for the first time since 2007 - they were up by 0.5%.

On an overall annual basis, daft.ie says prices fell 6.6% for the 12 months to the end of March.

MyHome.ie records prices nationally down 9.8% over the same period.

The pointers in these reports have implications for government policy as there is a clear need to restart construction projects in major urban areas close to where the jobs are, but in the other areas there are clear oversupply problems.

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Small and medium-sized business group ISME has reported a rise in activity in the first quarter in nine out of 12 of its business indicators

However it sounds a particular warning bell about the export sector.

ISME says it showed a marked decline in the quarter both in actual and expected exports based on the SME export statistics.

They also point to the sales trends warning that the retail figures are still on the way down despite some positive signs in other sectors of the economy.

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US factory activity grew at the slowest rate in three months in March.

It suggests that the US economy lost some momentum at the end of the first quarter as the effects of tighter fiscal policy started to kick in.

Higher taxes and an $85 billion across-the-board cut in US government spending took effect March 1 - these are the first signs that the adjustments have weighed on economic activity.

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A US court has approved a petition of bankruptcy for the Californian city of Stockton, which has been badly hit by recession and the housing crisis.

It concludes the first part of a lengthy battle and represents a setback for bondholders and insurers who stand to lose billions of dollars.

It is the biggest city in the US to apply for bankruptcy and the process will be watched closely by other strapped cities, including Detroit.