Morning business news - July 14Monday 14 July 2014 12.01
While there are a number of signs of economic recovery in recent months, retailers up and down the country are still struggling to survive in a tough market.
According to Steven Lynam, director of IBEC’s Retail Ireland, the improving economic data belies the fact that consumers are still under pressure – something that inevitably gets passed on to the retail sector.
“It’s been a tough few years, this recession has dragged on for six years and retail has been at the sharp end of that,” he said.
“Consumers have lost huge amounts of income, many have lost their jobs and those lucky enough to still have a job have seen cuts in salaries and income tax hikes.”
Mr Lynam said people were now looking to the Budget in October to see if something will be done to relieve this pressure on consumers, which he said would “give them a bit of confidence and a bit of hope of a turnaround.”
KBC Bank chief economist Austin Hughes said that while employment is up, wages are still down – while taxes and charges are eating up people’s disposable income.
This is coupled with a lack of consumer confidence in any talk of a recovery.
“They don’t have certainty,” he said. “Although the forecasts are very good the events of the last few have put them right off forecasts, so predictions of a better future aren’t going to get them rushing into shops.”
Mr Hughes also said that the way people shop has changed, with widespread “conspicuous consumption” now a thing of the past, with “canny consumers” now more common.
“[They’re] engaged in a sort of guerrilla warfare with the retailer... I think they’re being very careful with what they do and that’s going to remain that way for a few years.”
In June there was a further expansion in construction activity, and that's for the tenth month in a row. According to UIster Bank there was a rise in new orders, purchases and in employment in the sector.
The bank's Construction Purchasing Managers' Index - which has been going up since September 2013 - showed the most growth in the residential sector, with activity on housing projects increasing at a "substantial and accelerated pace" it says.
Commercial activity continued to rise, though at a slower rate than in May. And, a solid decline in civil engineering activity was recorded, with the pace of reduction faster than that seen in May.
The restaurant chain Pizza Express - which owns the Milano restaurants in Ireland - has been sold to a Chinese firm for around £900m, following "considerable interest" in the business.
The UK Gondola Group confirmed the sale to private equity firm Hony Capital.
There are 12 Milanos in Ireland, with 436 Pizza Express restaurants in the UK and 68 internationally - including 22 in China - employing more than 9,000 workers.
Pizza Express already has 12 restaurants in Hong Kong and nine in Shanghai, as well as outlets in India, Saudi Arabia and Bali.
The sale comes as The Gondola Group - which also owns UK pizza chains Zizzi and ASK Italian - opened the first Pizza Express restaurant in the Chinese capital Beijing earlier this year.
It follows other big Chinese purchases of UK brands, including two years ago when China's Bright Food bought a controlling stake in Weetabix, which owns that breakfast cereal brand as well as Alpen and Ready Brek.