PACE OF BUILDERS' JOB CUTS SPEEDS UP - The rate of decline in Irish construction is slowing - that is the conclusion of the latest construction Purchasing Managers' Index published by Ulster Bank this morning. This is despite an acceleration in the pace of job cuts. The index rose for the second month in a row and recorded the slowest contraction in the sector since November 2007.
Simon Barry, an economist with Ulster Bank, says the easing in the rate of contraction is the first step towards stabilisation in the sector. He points out that the index hit its record low in January and has risen for the last five of the six months since. But he predicts it will be quite a while before the index sees any increase in activity.
***
FOOD STOCKS A HEALTHY OPTION - Bloxham Stockbrokers has produced its twice yearly report on the Irish agrifoods and beverages sector. According to the report, several companies listed on the ISEQ have seen significant increases in their share value over the past six months and are poised to make further gains in the second half of the year.
Bloxham analyst Joe Gill says the sector has proven itself to be very resilient in 2009 despite a very tough environment. He says the overall group of eight companies which makes up over 20% of the market is up over 30%. Within that group, there are some outstanding performances with the likes of C&C, which is up 129%, Fyffes up 95% and Total Produce up 75%. He says it is worth remembering that the firms' price did not collapse in the first place, they just struggled in an overall tough market.
Mr Gill predicts that many of these firms will also continue to do well as the year progresses. He says that unlike many of their peers internationally that went on acquisition binges in the middle of the credit boom, the Irish companies proved to be very conservative. He estimates that based on net debt levels to cash flow ceilings, they can spend up to €2 billion on acquisitons at this point and remain well within their banking covenants.
***
MORNING BRIEFS - Aer Lingus says it carried 1.12 million passengers last month - an 8.2% increase on July 2008. However, load factor - that is the measure of how full its planes are - fell by 1% to 82.3% when compared to the same month last year.
