Morning business news - January 13

Monday 13 January 2014 10.32
Morning business news with Brian Finn
Morning business news with Brian Finn

A number of indicators are pointing to potentially good growth in the business sector this year. The group Vision.net has reported a stabilisation in the number of companies going bust, with an 11% fall in the 2013 numbers compared to the previous year. The Small Firms Association has reported what it said is the strongest sentiment data in years. And Grant Thornton have a report out this morning pointing to very bullish expectations among Irish business this year.

Pat Burke, a partner with Grant Thornton, said there was increased optimism overall among Irish firms with 72% of businesses reporting positive sentiment. "We've seen improved turnover and profits, and employment prospects are up. It's a much improved picture on last year and reflects the changes in how things have been done since the crisis broke a number of years ago," he said. Upward wage pressure is a feature of the report with a third of businesses expecting to increase their wage costs in line with inflation, or slightly above. "That's something that will play out in the course of 2014. We've done a lot to gain our competitiveness so one wouldn't be in a rush to increase gross pay but certainly, an improvement could be sought on net pay," Mr Burke said. 

One of the stand-out features of the report is the extent to which Ireland has pulled away from the so-called PIIGS countries in terms of business sentiment. "It's good to get back to a situation where PIGS is spelt with one 'i' for Italy," Pat Burke said. "We have jumped significantly in outlook where some of the peripheral countries have not moved at all. France is at the bottom of the league globally. Unemployment is at 11% compared to 5% in Germany. There will be a lot of tension given France's size and that could contribute to an uneasy year in the euro zone," he concluded.

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MORNING BRIEFS - There was more positive news from the construction sector where Ulster Bank has reported the fourth consecutive month of growth in activity in December. The construction PMI now stands at above 58 - anything over 50 signals growth in a sector. New orders were very strong which is a good indicator of future activity in the sector.

*** The British government is reportedly set to announce today that it will take responsibility for all British government debt should Scotland vote for independence. Reuters is quoting a source familiar with the situation as saying that London would essentially be the counterparty on any debt that was owed. It is understood a bilateral arrangement would be reached between the two governments about Scotland's share of the debt should the vote for independence pass in September.

*** Aer Arann, the operator of Aer Lingus Regional, has reported a 10% increase in passenger numbers for 2013. It carried 1.1 million passengers in the year. Passenger numbers to and from Dublin were up nearly 40% in 2013. The airline will begin operating two new routes in the summer adding Shannon-Bristol and Cork-Newcastle to its network.