Morning business news - September 2

Tuesday 02 September 2014 10.44
Morning business news with Brian Finn
Morning business news with Brian Finn

Recruitment specialists CPL Resources have reported record revenues and gross profits in its full year results, which the company said reflected an improved jobs market. 

Anne Heraty, CEO of CPL Resources, said one of the stand-out features for the company this year was the growth in permanent recruitment. "In CPL, we're seeing an improved jobs market. The unemployment rate at 11.4% is much too high, but there's been a significant improvement and that's very encouraging." She said the company saw its fees for placing people in permanent jobs increase by 32% and it placed about 8,500 people in permanent jobs last year. 

Anne Heraty said the improvement was across the board with all divisions performing well. "The food sector is performing very well as is pharma, engineering and technology. And it's also in the domestic economy as well as the international sector. A year ago I would have said it was just the international FDI sector, but now the domestic market is following," she added.

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It looks like domestic renters are not the only ones who are having difficulty in finding suitable accommodation in Dublin. Rents for city centre office space are rising rapidly, mainly it seems due to a lack of supply. Property group HWBC predicts that rental growth for city centre office space will come in at around 30% this year.

Tony Waters, Investment Director at HWBC, said rents have accelerated, but are coming from a low level to "economic levels" to allow new development to occur.  "You'll see a wider spread of recovery from the city centre out to areas like Sandyford and East Point in the north inner suburbs. Demand tends to be fairly spread out and getting a regional spread is a very good thing," he said. Stating that not everybody needs to be in the city centre, he adds that a lot of organisations have back offices and they need to be in more affordable locations.

The city centre demand pipeline currently stands at about a million square feet. Tony Waters estimated that to equate to five times the size of Bank of Ireland's former headquarters on Baggot Street. "The big firms on the list include Linkedin, Twitter and Workday. They account for about a third of the demand out there," he said. Tony Waters said there was an appetite and the capacity to build about four million square feet or so over the next few years. "This will occur around the docks area and we've seen the IDA, NAMA and Dublin City Council get rezoning of lands for a Special Development Zone and you'll see those areas being rapidly developed. Important too, though, is the recycling old buildings," he concluded.

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MORNING BRIEFS - Fresh produce distributor Total produce has reported total revenues of €1.59 billion for the first six months - down 1.7% on the same time last year. Earnings per share were up marginally to 4.86 cents. It is maintaining full year earnings per share guidance of 8.4 to 9.4 cent.

*** Hotel prices here are on the way up, but there is a dispute as to by how much. According to a price index from Hotels.com, room rates here increased by 10% to an average of €101 a night. The most expensive hotels are in Killarney, where an average room rate comes in at €111 a night, up 4% in the year. Dublin's room rates are up by 15% to €107 a night on average. However, the Irish Hotels' Federation has rejects the index findings. It says price hikes are running at just under 3.5% nationally, with figures in Dublin running slightly ahead of this.

*** The price of bonds across Europe's periphery went up further yesterday as poor manufacturing data firmed up the certainty that the European Central Bank would take some action in the coming months to boost the European economy. When bond prices go up, the yield goes down - in other words, it is cheaper for countries to borrow money.
Italy's 10-year yield dropped two basis points to 2.42%, while the yield on Portugal's 10-year bonds fell three basis points to 3.19%.  The uncertainty has also driven the euro to a one year low against the dollar.