COLD SNAP HITS CONSTRUCTION INDUSTRY - December's freezing weather conditions contributed to a further reduction in construction activity in Ireland. Last month, according to the Ulster Bank Construction Purchasing Managers' Index, civil engineering was particularly weak, commercial activity also declined at a more rapid pace and while the pace of decline in housing eased, homebuilding is still contracting.
Ulster Bank economist Simon Barry says that the construction sector faced two areas of difficulty last month - the underlying weakness of the economy and the unprecedented cold snap.
On today's meeting of finance ministers in Brussels today, Mr Barry says that he was disappointed with the German Finance Minister Wolfgang Schaeuble's comments that he sees no need at the moment to discuss an increase in funding for the EU rescue fund. He says the markets had been expected either changes to the size of the fund or the way it operates. He says the issue looks like it will now be kicked back to February or ever March.
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IBEC FOOD GROUP SAYS PRICES ON THE RISE - Food and Drink Industry Ireland, the IBEC group representing the food sector, says the strong performance of the food and beverage sector last year is set to continue this year. A breakdown of the sector's responses in IBEC's Business Sentiment Survey finds that food companies are more positive about the business environment and future prospects than the wider business community.
Food and Drink Industry Ireland director Paul Kelly says the the sector remains upbeat with overall sentiment improving. He says that the industry has seen improved cost competitiveness, favourable currency movements and improved consumer sentiment in overseas markets. The domestic market, however, is still facing difficulties.
Mr Kelly says that after a benign period of food inflation, rising international food commodity prices are putting pressure on food processors and will eventually lead to food price inflation.
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MORNING BRIEFS - Ahead of a meeting of Finance Ministers in Brussels today, the German Finance Minister Wolfgang Schaeuble says he sees no need right now to discuss an increase in funding for the EU rescue fund, and that ailing euro zone countries must solve their budget problems on their own. The Minister said the aim was to find a mid-term solution to the issue of debt, and that today's discussions can be held about how to completely use up all of the money in the fund. Ministers today will discuss an increase in the effective lending capacity of the European Financial Stability Facility, under which the effective amount it can lend to countries in need is around €250 billion. Helping Portugal and Spain would stretch its resources to the limit. Last week both the European Commission and the European Central Bank called for boosting the effective capacity of the EFSF as well as expanding its scope of operations. Germany, the biggest euro zone economy, is key to any agreement on changes.
*** Jim O'Neill, the chairman of Goldman Sachs Asset Management, and the man who coined the term BRIC for the emerging economies of Brazil, Russia, India and China, will be adding Mexico, South Korea, Turkey and Indonesia to his new list of growth markets later this month.
*** On the currency markets the euro is trading at $1.3311 cents and 83.98 pence sterling.
