BANK TESTS TO DETERMINE DETAILS OF IRISH BAILOUT EXIT - Ireland’s ambitions to exit its bailout without having to take a precautionary credit line from the European Union and the International Monetary Fund may be stymied by European concerns about the strength of the Irish banks, says the Irish Times. Taoiseach Enda Kenny said this weekend that Ireland would exit its three-year bailout on December 15th. Having indicated in June its intention to seek a precautionary credit line to ease its passage back to full private market funding, Ireland may now seek to exit the programme unaided. Any credit line would come with conditions similar to those that applied during the bailout and undermine claims Ireland has regained economic sovereignty. EU commissioner for economic and monetary affairs Olli Rehn appeared to support Ireland on Friday when he said the country may exit the bailout without a financing backstop measure. It coincided with Minister for Finance Michael Noonan highlighting Ireland’s significant cash buffers of €25 billion to the Fine Gael party conference this weekend. “The cash buffers have given us the kind of backstop that we need,” the Minister said. However, euro zone sources have made it clear that any decision on an exit strategy for Ireland will be predicated on the outcome of bank stress tests which are being undertaken by the Irish Central Bank.
CONSTRUCTION INDUSTRY FACING WORKER SHORTAGE - School-leavers who thought the bubble had burst on a career in construction or property should think again. The recovery in the housing market has seen a bounce-back in job opportunities - and there are not enough suitably qualified graduates to fill them, says the Irish Independent. There are also concerns of an emerging professional skills shortage in construction, amid reports of a government stimulus package in tomorrow's Budget to kickstart the industry. Demand is growing for surveyors, who undertake a range of roles within the property and construction sectors, such as quantity surveying, project management and valuation. The collapse of the building and property sectors five years ago triggered an understandable and dramatic fall in interest in third-level study in courses linked to these areas. CAO applicants switched to disciplines such as science and computing, that they or their parents regarded as offering a better chance of a job after college. The result was that between 2008 and 2013, CAO first preferences for property and construction-related courses plunged from 552 to 195.
PLAY AND EDUCATION SALES HELP BOOST SMYTH'S UK ARMS TO RECORD PROFITS - Sales of Furby, Monopoly Millionaire, and learning tablets last year helped the British and Northern Ireland arms of family-owned Irish toy-seller Smyths record combined pre-tax profits of £2.7m (€3.2m). The Irish Independent says that the Galway-headquartered business is Ireland’s largest toy retailer and recorded the profit after revenues at the two units increased by 47% from £123.8m to £181.8m in the 12 months to the end of December. However, the prior period, when the £123.8m revenues were recorded, was only for a nine-month period. Accounts just filed with Companies House in the UK for Smyths Toys UK Ltd and Smyths Toys NI Ltd show pre-tax profits last year fell 12%, from £3.09m to £2.72m. However, the chief factor behind the drop was a £577,503 loss on the sale of an asset by the British unit. The combined profit takes account of combined non-cash depreciation costs of £3.4m last year. The group operates 69 stores in total - 41 in Britain, 22 in the Republic, and six in the North. The business, led by the four low-profile Smyth brothers - Anthony, Liam, Patrick, and Thomas - is one of Ireland’s most successful retail businesses. The firm only entered the UK market in 2007 and its business has grown exponentially there since, now accounting for an estimated 59% of revenues after 41 store openings made up of 35 in England, three in Scotland, and three in Wales.
IRELAND: BACK ON THE MARKET - At the height of Ireland’s building boom Dublin was known as the city of cranes. Their brightly coloured steel masts towered over building sites, testament to the dominance of a construction sector that by 2007 accounted for almost a quarter of the value of the domestic economy. Today the forest of cranes has disappeared from the skyline, victim of a financial crisis that forced the country into an international bailout. Employment in construction has slumped by almost two-thirds and the industry now accounts for only 6% of gross national product. But recently there have been signs of life, writes the Financial Times. Construction output in the second quarter rose 1.7% over the quarter and 11.7% in the year, the highest rate of expansion since 2006. Employment in the sector grew by almost 6,500, which is feeding into a wider economic upturn in Ireland. Unemployment has fallen from 15.1% last year to 13.3%. Property prices are rising and consumer confidence is at a six-year high. Sisk, Ireland’s biggest construction company, is one of the survivors in a battered sector. But Liam Nagle, its chief executive, strikes a cautious tone on the country’s prospects. “For us the decline has stopped and there is a little bit of an uptick. But I am not talking about green shoots yet. A lot will depend on the budget.” Dublin launches its seventh austerity budget in six years on Tuesday and the stakes for the country and for the euro zone could not be higher. In December, Ireland is poised to become the first euro zone country to leave a bailout and investors are watching closely.