IRISH ECONOMY UP TO SIX MONTHS BEHIND THAT OF EURO ZONE - At the end of last week we learned that Germany had jumped out of recession, as well as France and Italy. Overall economic growth in the euro zone came in at 0.4% for the three months to the end of September. But that is a tale that does not apply to every euro zone member - including Ireland.
The chief economist with Davy Stockbrokers, Rossa White, says he believes the current euro zone recovery is sustainable. He says that while Germany and France actually did pull out of recession in the second quarter with very modest growth, the rest of the euro area was still in recession. He says that changed in the third quarter with countries like Austria, Belgium, Italy and the Netherlands all recording growth.
The analyst says that Ireland would well be the last euro zone country to exit the current recession with four of the smaller euro zone countries yet to issue their third quarter economic performances. He says that Ireland is three to six months behind the rest of the euro zone and Davys' view is that the economy will bottom in the last quarter of 2009. He adds that the economy will not see a return to growth until the first quarter of next year. He predicts that the Irish recovery will be 'pretty moderate' throughout next year.
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MORNING BRIEFS - Building materials group Kingspan says that overall trading has been more steady over recent months and it expects its operating profits for the year will be about €60m. That would compare to the €157m reported for 2008, which was a 34% decline on the previous year. In an interim management statement, the Co Cavan-based firm said that with the exception of Western Europe, construction markets remain under 'significant pressure'. It added that the non-residential sectors in Central and Eastern Europe and North America have both noticeably contracted in recent months. It warned that these markets are not expected to 'bottom out' for some time yet.
*** The country's retailers have written to every local authority asking for a 20% cut in commercial rates. That lobby has been extended to the leaders of the bigger political parties requesting their councillors support the reduction. It says the average commercial rate has increased 57% since 2000 and in some local authorities are still increasing.
*** The Sunday Tribune yesterday reported that Anglo Irish Bank has told the the Department of Finance it will need a financial injection of another €5.7 billion to restore its capital levels to internationally acceptable standards. Anglo has already received €4 billion in taxpayers' money but according to the Tribune has said it need the extra money to remain viable and develop as a small business lender.
***On the currency markets, the euro is worth $1.4990 and 89.52 pence sterling.
