Morning business news - August 11Monday 11 August 2014 11.39
Consumers are more likely to buy DVDs and other goods than at any stage over the past few years, according to the Marketing Institute of Ireland and UCD's Smurfit Graduate Business School. Their consumer market monitor, which draws on a range of data from the CSO, the Central Bank, the ECB and the European Commission, puts consumer confidence at its highest level in seven years. The monitor points to a pick-up in consumer spending as predicted recently in the latest forecasts from both the ESRI and the Central Bank.
Mary Lambkin, Professor of Marketing at UCD Smurfit School, is one of the authors of the monitor. The Professor says the latest figures show that 2014 is definitely the turning point for the economy. Explaining that people's perception of their consumer confidence drives their expenditure, she says that people are more optimistic about their future, despite their disposable incomes remaining under pressure. Professor Lambkin says that people watch the news about the improving economy and rising house prices - and when people's homes go up in value they feel more confident about their personal finances.
The monitor is compiled from numerous sources and Professor Lambkin says the Marketing Institute and UCD Smurfit Graduate Business School brings them all together and cross-references all the data to give a consistent picture of what is happening in the economy. She says the like of car and house sales are good indicators of increased consumer confidence. This in turn drives sales in other areas like hardware and furniture and furnishings. The knock-on effect from one sector to another then becomes very evident, she adds.
MORNING BRIEFS - Activity in the construction sector rose for the 11th month in a row in July and the rate of expansion in output and new orders was the highest in three months. The latest Ulster Bank purchasing managers index, a gauge of activity and sentiment in the sector, benefited from a surge in housing construction. Analysing the results from the sector, Ulster Bank economist Simon Barry said that levels of residential building still remain very low following the crash but that the rate of expansion in July was the fastest in that segment of the construction industry for 15 years.
*** Online retail powerhouse Amazon appears to be squaring up to film studio Disney in the latest in a series of contract disputes. The Wall Street Journal reports this morning that Amazon has stopped taking pre-orders for a number of upcoming Disney DVD releases including Malificent, Muppets Most Wanted and Captain America: The Winter Soldier. It is a tactic Amazon has deployed a number of times in the recent past against both the book publisher Hachette and Disney's rival Time Warner. Limiting pre-orders can depress sales of a film or book. In its ongoing dispute with Hachette, Amazon has been pushing the publisher to set the price of electronic books at $9.99 as opposed to the $12.99 or $14.99 Hachette was seeking for new titles. Neither Amazon nor Disney have made any comment on the apparent spat between the two.