PHARMA SECTOR SET TO CONTINUE TO DOMINATE IRISH EXPORTS - The most recent positive economic growth figures for the second quarter came on the back of an improved export sector. And that trend looks like continuing, according to HSBC's bi-annual Global Connections Trade Forecast.
Alan Duffy, who heads up the HSBC's Corporate Banking team in Ireland, said that pharmaceuticals would continue to dominate our merchandising exports. "The growth in exports of between now and 2030 is projected to be in the order of 6%. 60% will be dominated by chemicals and the pharma sector," he says.
The "patent cliff" - where exports suffer from medicines coming off patent - is a cyclical problem which is not likely to cause continuous difficulties. "There's always a suite of drugs ready to replace drugs that comes off patent. Ireland is still an attractive location for inward investment. US companies invested more here in 2012 than in all of Asia. That will drive the pharma sector," Alan Duffy explains.
The area of infrastructure trade is one that is expected to grow exponentially and replace merchandise in the coming decades. HSBC says that Germany dominates in this area, but India and China are likely to take over. We will continue to be net importers in this area, but Alan Duffy says our trade figures in this area will grow.
The HSBC man says that we as an economy are not a great producer of infrastructure goods. "Reflective of the economic upturn that's taking hold here, our share of infrastructure imports is set to rise from 20% to 35%", he states. Emerging market economies will continue to account for a greater proportion of our trade into the future. China is expected to supplant France as our fourth biggest trading partner by 2030 and Central American countries are said to be coming up the scale.
MORNING BRIEFS - Asian stocks and commodities were trading lower again overnight in response to the ongoing US budget and debt celling crises. The Nikkei in Tokyo has declined 4.5% in the past four sessions and is at a five week low. But there were faint glimmers of hope of a breakthrough in the shutdown and debt ceiling negotiations overnight. President Barack Obama indicated that he would consider a short-term extension to the debt ceiling in order to get past the October 17 deadline when the government hits its $16.7 trillion borrowing limit. At the same time, influential Republican Senator Rob Portman floated a plan to cut spending and reform the tax code in exchange for a budget and debt-ceiling deal.
*** The recovery in the UK housing market looks like its gathering pace. Figures from the Royal Institute of Chartered Surveyors show that British house prices rose at their fastest rate in 11 years in September and sales hit a four-year high. Prices rose in all regions except the north-east of England, and respondents now expect prices to grow by 2.6% in the next 12 months.
*** There are stark warnings today for the one in ten households that have not paid their local property tax. Taxpayers who are due to pay and file in the next few weeks are being reminded that they may face a 10% surcharge if they do not file their LPT obligations. The Taxation Institute says taxpayers can avoid the surcharge by filing their property tax now and make arrangements to pay any outstanding LPT or household charge. Otherwise, they run the risk of having the 10% applied to their property tax and their income tax. For anyone declaring capital gains tax, the surcharge could be applied to that too.