LITTLE CHRISTMAS CHEER FOR IRISH RETAILERS - Broadcasting from Bewley's Grafton Street in Dublin city centre, Emma McNamara has been finding out just how thrifty and frugal a Christmas this really is.
Frank Gleeson, the chairman of IBEC's Retail Ireland, says that sales this Christmas are still very slow despite the big discounts and early sales being offered by retailers. He expects this year's retail figures will be lower than last year's and says the sector has seen a decline of up to 30% over the last three years. He predicts that most gifts will be practical this year. He also warns that up to 20% of retail space could be lost next year as retailers are forced to close their shops and big chains could actually leave Ireland. He says that things will only worsen when the higher VAT rates comes into force in January.
The chief economist of KBC Bank Ireland, Austin Hughes, says that consumers are facing a very tough time with lots of issues affecting sentiment. These include a drop in employment, rising unemployment, €24 billion taken out of the economy through budget measures, cuts in hours, overtime and bonuses. The slowdown in the construction sector means there is no demand for furniture and household goods, he adds. He says that consumers are very nervous and are only spending what they have to.
However, he says that consumer sentiment is stabilising as people start hoping that perhaps the worst is now behind us. He says the fact that pay packets have not been hit by the Budget is good for sentiment. The economist says that conditions will remain tough, but that he is expecting an improvement in consumer spending towards the end of 2012. Further expected interest rate cuts by the ECB early next year will also help consumers, especially those who are debt-burdened.
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MORNING BRIEFS - Figures from the Central Bank, quoted in the IMF's latest report on Ireland, show that one in five homeowners are in trouble with their mortgage repayments. Those who were first-time buyers are the worst affected by home-loan difficulties, especially those who bought between 2005 and 2008. Almost 63,000 homeowners are in arrears for three months or more. On top of this, close to 70,000 people have been forced to do deals with their lenders to lower monthly repayments. There is a total of 773,420 residential mortgages, according to separate Central Bank figures.
*** Figures from Moody's suggest that more than one in ten mortgage borrowers had fallen behind with their repayments by the end of October, marking a new peak in home loan arrears. The credit ratings agency said that arrears of 90 days or more in a pool of mortgages representing close to half the Republic's home loans rose to 10.14% in the three months to end of October. Moody's said the level of arrears had risen steeply since its previous report, published in July, which showed that 8.85% of borrowers were 90 days or more behind with their mortgage repayments.
*** Longford based healthcare firm Abbott has shipped its one billionth medical diagnostic test from its base in Longford after just six years. In Longford, Abbott makes diagnostic test kits for use in hospitals, reference labs, GP surgeries and clinics, and its tests are exported from there to more than 130 countries.
*** On the currency markets the euro is trading at $1.3041 cents and 83.26 pence sterling.
