Morning business news - January 30Thursday 30 January 2014 11.25
Construction group AECOM Ireland is predicting growth of the order of 5-7% in construction activity this year. Paul Mitchell, Director of AECOM Ireland, said that after several successive years of decline, the industry was cautiously optimistic.
"We've seen the positive effects of foreign direct investment with companies coming in and fitting out existing buildings. There's also the pent-up demand for residential property and there's the Government stimulus package with projects like Grangegorman and others within the PPP programme," he explained. Mr Mitchell said that much like the property sector, most of the construction activity was focused on Dublin, with some sporadic patches of activity elsewhere. "Cork is showing some activity from the pharma point of view. HP are building offices in Galway and Limerick is getting on the move. However, the midlands is suffering from oversupply both on the residential and commercial sides."
Paul Mitchell said the banks were beginning to make a return to the construction sphere and are funding projects again. "The metrics are obviously very different. We've investors coming in from outside which means the banks can further deleverage and fund further construction projects." He said tenders were still extremely competitive in the construction sector with a prediction of a 3% increase this year. "That's off a very low base. There's still a lot of value to be had," he concluded.
MORNING BRIEFS - The US Federal Reserve has decided to stick to its policy of reducing stimulus. At Ben Bernanke's final meeting as Fed chair, the Fed announced that it was adding to the taper and taking a further $10 billion out of its monthly bond purchases bringing it from $75 billion to $65 billion a month. He cited an improving US economic performance and outlook. The move led to a huge sell off on stock markets, adding to the turmoil that started about a week ago. Markets on Wall Street, Asia and Australia were down; Japan's Nikkei closed down 2.5%.
*** Facebook last night reported its strongest revenue growth in two years, beating Wall Street targets. Shares in the social media company gained 12% to just under $60 in after-hours trading. Revenue from mobile ads represented over half of its total advertising revenue in the last three months of the year. The migration of advertisers to mobile had been the company's weak spot, but the move appears to be gathering pace.
*** Google has sold US mobile phone company Motorola Mobility to Chinese computer maker Lenovo for $2.9 billion. The deal represents a substantial loss on the $12.5 billion it paid for the company less than two years ago. But it never really was about profits for Google - it just wanted to put pressure on rival, Samsung. Under the terms of the deal, Google will keep the majority of Motorola's lucrative patents, which includes one for Android software.
*** Datalex has entered into agreement to provide JetBlue Airways with its new e-commerce platform. JetBlue is the second biggest low cost airline in the US carrying in excess of 30 million passengers each year. Datalex already provides e-commerce to Aer Lingus which is a code share partner with JetBlue.
*** Employment services group CPL Resources has reported a strong set of results for the first half of its trading year to the end of December. Revenue was up 14% to €184m, while profits before tax rose by 17% to €7m with earnings per share at 19.8 cent, up 17%. The company said it expects further growth in the second half.