Morning business news - July 11

Friday 11 July 2014 10.49
Morning business news with Emma McNamara
Morning business news with Emma McNamara

Figures released yesterday by the car industry show that already this year, sales of new cars have surpassed those of the whole of 2013. 74,911 new cars had been sold so far this year by Wednesday of this week, and almost 10,000 in the first week of the new 142 registration plate.

Alan Nolan, the director general of the Society of the Irish Motor Industry, says the new figures represent good news for the car industry, adding that what is good for the industry is good overall for the whole economy. While new car sales already this year are more than the whole of 2013, Mr Nolan points out that the figures are coming off a very low base and are still only 60% of a normal market. However, he adds that they are an indicator of a really good recovery and are moving in the right direction. The SIMI director says the increased sales reflect improvements in consumer confidence and a return to more normal levels of consumer spending. The fact that commercial vehicle sales are also about 38% higher is a good sign of an improving economy.

Mr Nolan says the increased sales will result in about €100m of additional revenues for the state in the first six months of the year. As well as increased revenues, the improving sales figures mean more jobs in the car industry and improved road safety and environmental impacts. But the average age of the Irish fleet is much higher than the European average, and will reach 10 years next year. Mr Nolan says this means those cars will have to undertake an NCT every year, adding that older cars are not maintained as well as younger models. He says those who are still working in the industry are "real survivors" and are now focused on every deal and every customer

***
MORNING BRIEFS - Merrion Stockbrokers, in its latest Irish Quarterly Economic Outlook, forecasts real GDP growth of 3.3% in 2014 and 3.9% in 2015 - quite a lot more optimistic than other forecasters. Merrion economist Alan McQuaid says the budgetary figures in the year-to-date have been positive, and the economy "definitely" appears to be on an upward trajectory. Unemployment rate remains the key indicator as far as the Irish economy is concerned and steady progress is being made in terms of bringing it down, he adds.

*** In a trading update this morning, recruiter CPL says the business continues to perform well and that the full-year results to the end of June will reflect growth in revenues and profits. The company expects profit before tax to be in line with market expectations of around €14m. 

*** Stock markets in Europe and the US fell yesterday over concerns about the health of one of Portugal's biggest banks. Shares in Banco Espirito Santo were suspended after falling 17% following concerns about accounting irregularities at its Luxembourg based parent group. Reports highlighting concerns about certain financial practices at the Espirito Santo group surfaced at the end of last year. Portugal's central bank then ordered an audit into the group's accounts, which uncovered "serious" accounting irregularities. The Portuguese government has said that Banco Espirito is isolated from problems at its parent, and that public finances are not at risk. The International Monetary Fund, while saying it does not comment on individual banks, said that while the Portuguese banking system has been able to endure the crisis without significant disruption, pockets of vulnerability remain.

*** And Google is launching a venture capital fund to invest in promising European technology companies. Google says the $100m fund will "invest in the best ideas from the best European entrepreneurs". The new operation will be based near London's Silicon Roundabout start-up district.