SOBERING FIGURES HIGHLIGHT CONTRACTING ECONOMY - Two sets of figures are released this morning which give some insight into our contracting economy. New data shows that the country's manufacturing industry last month saw the first deterioration in operating conditions since February. The NCB Purchasing Managers' Index for September - which shows the health of the manufacturing sector - fell below the no-change mark of 50 for the first time in seven months as key measures of activity such as new business orders and employment all decreased. The PMI fell to 48.4 in September from a reading of 51.1 in August.
The second set of figures relates to the number of companies going broke. Figures from Insolvencyjournal.ie showed a rise in companies going bust in September compared to August - 90 in August compared to 120 in September.
Ken Fennell, a partner in KavanaghFennell, the firm who compile the data, says he is predicting 1,500 insolvencies for the whole of 2010 - up 10-12% on last year. But he points out that there is some signs of stabilisation as insolvencies peaked at 150 in February and eased to 120 last month. He says the rate of increase it not as great as had been previously feared, but adds that the figures do not take account of personal insolvencies which affect partnerships and sole traders.
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MORNING BRIEFS - We are the news on the international newspapers today. But the headlines show a country seeking to be pro-active about its problems. The front page of Wall Street journal's Europe edition says yesterday's figure 'underscores the country's new and unwanted status as the next hot spot in Europe's continuing financial turmoil.' It continues that most European officials 'for now' say it is unlikely that Ireland will need assistance.
*** The front page of the International Herald Tribune talks about yesterday's injections into two of the biggest banks as underscoring the extent to which they continued to jeopardize Ireland's economic condition. 'Compounding the government's difficulties is the fact that the economy continues to stagnate, making it all the more difficult for the banks to collect on their loans'. It says this year 'Ireland will be the only major European economy to experience three consecutive years of negative growth.'
*** The Daily Telegraph goes in search of a hard news angle to the story, with the bottom of its front page carrying the headline ' Irish bank faces collapse' and the lead in its daily business supplement carrying the headline 'Irish bank rescue at risk from traders'. What the story says is that a small group of London and American hedge funds have threatened to derail the €29.3 billion rescue plan for Anglo. They are junior debt holders who are anxious to avoid being offered around 20 cent in the euro for the money they have loaned Anglo Irish Bank. According to the Telegraph, they want to be paid 40 cent in the euro. It says they are understood to be prepared to fight their case in court.
*** In the Financial Times, the country is the lead editorial comment. It says that Dublin's plan aims to finalise the tab Irish tax payers will pick up for the wild speculation and cronyism that passed for lending at Anglo. The editorial points to future uncertainties. There is also a sting for the Government in its final line. 'The economic loss is at last being accounted for. The political irresponsibility that made it possible has yet to face its reckoning,' it writes.
*** The Financial Times' LEX column welcomes the reduction in the yields on Irish 10-year debt we saw yesterday. 'That is something to be grateful for, as is the certainty that Irish people who die will go straight to Heaven from now on, because right now they are caught between hell and purgatory,' it states.
*** This morning the euro is at $1.36 63. Yesterday it hit a five-month peak of $1.3684 helped by data showing euro zone banks are relying less on funds from the European Central Bank. The euro has rallied 15% against the dollar since hitting a low in June and about 7% since the start of September.
