ACTIVITY CONTINUES TO FALL IN BUILDING INDUSTRY, BUT COMPANIES NOW MORE OPTIMISTIC - For almost four years activity in the construction sector has been falling, with the construction index from Ulster Bank showing declines now for 46 months. Apart from overall weakness, what is now hitting businesses in the sector is higher oil and fuel prices.
Simon Barry, economist at Ulster Bank, says that the Irish construction sector continues to face signs of difficulties. He says the key driver of the ongoing declines is the lack of new business. During March, the civil engineering was the worst performing sector of the industry while the housing element of the industry saw the fastest pace of decline since December. Mr Barry says he expects the industry to continue to experience contraction in the near term, with a new upward pressure on input costs coming from higher oil and fuel costs in the last few months. However, the economist says that building companies are now at their most optimistic in four years, with 45% of respondents expecting business activity to increase over the next 12 months.
On the wider economy, Mr Barry says that the Irish economy is continuing to see ongoing support from the global economy. He says that while domestic demand remains very weak, the internationally traded sector of the economy continues to do well.
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MORNING BRIEFS - China has posted its first quarterly trade deficit in seven years, as it continues efforts to rebalance its economy. The deficit for the first three months of the year stood at $1.02 billion, according to the latest data from the Chinese General Administration of Customs. For the month of March, the country reported a tiny trade surplus of $140m. The country has been trying to boost domestic demand after criticism of its export-led growth policy over past years. But, demand from its key markets like the US and Europe has slowed down, as they recover from the global financial crisis.
*** It will another big week for bank news - AIB has its annual results out tomorrow, while Bank of Ireland's results are due on Thursday. AIB is expected to reveal the latest figures on its loan losses and its operating performance. It should also provide an update on changes to its management structure and its planned job cuts. Some weekend reports suggested that up to 2,000 jobs are to go at AIB. Meanwhile on Thursday, Bank of Ireland results will be examined for its funding and impairments details.
*** On the currency markets this morning, the euro is trading at $1.4459 cents and 84.78 pence sterling.
