Morning Business News - September 3

Wednesday 03 September 2014 10.40
Morning business news with Brian Finn
Morning business news with Brian Finn

Coca Cola has emerged again as the top brand here, according to an index compiled by Checkout magazine. The editor of Checkout, Steve Wynne Jones, said Coca Cola had topped the list for the last ten years.

"It's not the only consistent performer. Avonmore Milk and Brennan's Bread each came in at second and third for the last five consecutive years," he explained. "It's a competitive market out there. Food price inflation is at its lowest level in over two years. If you're a big brand you need to keep innovation going," he added.

Steve Wynne Jones said Irish brands performed exceptionally well this year. He cited the example of yoghurt brand, Glenisk, which came in at 33 - it wasn't in the top 100 at the turn of the decade. 

***
Google has emerged as our top exporter, according to a list compiled by the Irish Exporters Association and Investec Bank. Simon McKeever, CEO of the Irish Exporters' Association, said Google got the top spot after it had been vying for the position along with Microsoft for a number of years. He said it was no surprise that ICT was the top export sector with nine of the ten top global software companies and ten of the top global internet companies here. After ICT, the pharma sector was the top performer, apparently recovering somewhat from the pharma patent cliff. "The patent cliff carries on into 2015, but it does seem to be coming back with quite a lot with a lot of new product development," he said.

*** 
The recovery in Irish property values is only just beginning, according to Goodbody chief economist Dermot O'Leary. In his latest report on the property market, he said prices were rising very fast but from a low base. "This is all about cycles. We usually go from recovery to expansion and then get some response from supply. We haven't reached that level here largely because of constraints in construction. It's not a perfect expansion. That's why its not a quality recovery," he said.

Dermot O'Leary explained that the housing recovery lacked quality because of the low levels of transactions in the market - levels of mortgage lending are about half of what they should be and construction is staying at a fraction of the level it should be at. "We're at the start of the signs of a classic cycle. Whether it becomes a bubble depends on policy actions over the next few years," he explained.

On claims that a bubble was being driven by investors, Dermot O'Leary said it depended on actions from Government. "I wouldn't say demand is the issue. The level of mortgages being issued to investors is very low. I would say we need to end tax breaks. The issue we have here is totally different to the boom years. That was too much demand, this is too little supply," he concluded.

***
MORNING BRIEFS -  Activity in the services sector increased sharply in August, according to Investec's Purchasing Managers Index. It mirrors a strong performance in the manufacturing sector as reported on Monday. That index showed manufacturing activity hitting a 15 year high in August. Services activity was boosted by demand from export markets such as the US and Britain, Investec said. The four main industry sectors - business, financial, ICT, and travel and leisure - all showed growth for the last seven months. According to the PMI measure, anything over 50 denotes growth, while a figure under 50 signals contraction. The Irish services index has been above 60 for the past six months and has not fallen below the 50-point line for two years now.

*** While Apple might be readying itself for the highly anticipated launch of its new iPhone next week, it is fighting off some unwelcome publicity in the form of the celebrity hacking scandal. It issued a statement yesterday confirming that some celebrities' iCloud accounts were broken into, but said it found no evidence that this was caused by a breach of its security systems. Apple said hackers carried out the thefts via a targeted attack on user information. The statement follows the online publication of intimate pictures of about 20 personalities.

*** Switzerland and Singapore retain the top spots in this year's global competitiveness rankings from the World Economic Forum. Ireland climbed three places to 25th - its best ranking since 2009. In publishing its rankings, the WEF took the opportunity to warn that the health of the global economy is at risk, despite years of reform and monetary stimulus. It said the strained geopolitical situation, the rise of income inequality, and the potential tightening of the financial conditions could put the global recovery at risk.

*** Savills is putting the Spectrum Portfolio' - one of the largest retail portfolios to be ever offered to the market - up for sale. It comprises of Bloomfields Shopping Centre in Dun Laoghaire, the Mill Shopping Centre in Clondalkin, Kilbarrack Shopping Centre, Douglas Court Shopping Centre, in Cork, Dundalk Retail Park and the Quayside Shopping Centre in Sligo.