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Irish services companies registered another sharp expansion of business activity in July, with the rate of growth only slightly weaker than June’s recent high.

The Investec monthly services Purchasing Managers’ Index (PMI), which covers businesses from banks to hotels, eased to 61.3 in July from 62.6 in June, but nonetheless signifies a sharp rate of expansion in business activity.

Irish services companies continued to increase employment during July, extending the current sequence of job creation to 23 months.

Investec Ireland chief economist Philip O’Sullivan said services firms reported continued robust growth in new orders during July.

“With improving trends evident both domestically and across Ireland’s key trading partners, we are optimistic of further impressive PMI releases over the coming months at least,” he added.

He said there was a further sharp rise in staffing levels recorded during July, with some respondents saying that they took on extra staff in anticipation of further increases in workloads.

“The three month high in the business outstanding index shows that this expectation is warranted, as backlogs of work have been steadily building up since May of last year”.

Article Source:  http://tinyurl.com/kbwqb42

IRISH shares fell yesterday for their fifth day while the major European stocks rose, rebounding from four days of losses.

By the close in Dublin, the ISEQ Overall Index was down 0.34pc or 15.86 points to end the trading day at 4586.54.

The leaders on the Dublin market included packaging giant Smurfit Kappa, which rose 2.4pc to €16.61, while fruit company Fyffes was up 1.4pc to €1.07.

On the other side of the board, insulation group Kingspan fell 2.8pc to €12.02 and Kerry Group was down 1.3pc to €53.90.

Elsewhere, the Stoxx Europe 600 Index climbed 0.3pc at the close of trading, paring earlier gains of as much as 0.8pc.

The equity benchmark dropped 2.9pc last week as companies including ArcelorMittal and Holcim posted disappointing results.

National benchmark indexes advanced in nine of the 18 western-European markets. France’s CAC 40 added 0.4pc, Germany’s DAX rose 0.4pc, and the UK’s FTSE 100 gained 0.1pc.
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“Earnings in Europe have been a mixed bag,” said Pierre Mouton of Notz, Stucki & Cie in Geneva.

“European markets are pretty cheap on average so buying a bit now can be a good investment if you look ahead three to six months.”

Credit Agricole gained 2.2pc after posting second-quarter operating profit of €628 million, exceeding the average analyst estimate of €617m.

France’s third-largest bank by market value said fully loaded common equity Tier 1 ratio, a key solvency measure under Basel III rules, rose to 9.9pc at the end of June from 9pc in the previous quarter. The lender also booked €708 million in costs related to its 14.6pc stake in bailed-out Portuguese lender Banco Espirito Santo.

Deutsche Post gained 2.2pc. Read more

A new study of the housing market says we require 90,000 new homes over the next seven years – but 86pc of them should be within the Dublin commuter belt. The skewed nature of the market means that while a chronic shortage exists in some areas, there will be little work for builders in more rural parts of the country.

The Economic and Social Research Institute (ESRI) report says we need to build about 12,500 units a year up to 2021.

Dr Edgar Morgenroth of the ESRI has concluded that the property market has a massive oversupply in rural parts of the country, but huge shortages on the east coast.

His report comes up with a lower demand than previously suggested by taking vacant houses into consideration, and then looking at what is needed on a county-by-county basis.

Most houses are needed in Dublin, with demand also in Louth, Meath, Kildare and Wicklow. There will be “significant” housing shortages in the capital and its surrounds unless building levels begin to pick up rapidly.

“Of the 90,000 additional housing units required between 2011 and 2021, over 60pc (54,000 units) are needed in Dublin and a further 26pc are needed in counties Louth, Meath, Kildare and Wicklow. “Thus the requirement for additional housing units is projected to be highly concentrated in the Greater Dublin area,” Dr Morgenroth said.
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He noted that most of the building of homes last year was actually outside Dublin.

Only 1,360 units were completed in the capital, out of a total of 8,300 houses built.

Now there is a need thousands more units in the Dublin region alone. Read more

A new report released by the Central Bank today shows that lenders are now more inclined to offer repayment solutions to family struggling to meet their mortgage costs.

But just of half of those who are three months or more in arrears kept to the revised payment deal offered by their bank, the report says.

And one in 10 troubled mortgage holders made no repayments after their mortgage was restructured, the economic report, entitled ‘Mortgage Repayments After Permanent Modification’, found.

People are becoming more inclined to keep to the restructure deal, but banks need to do more, the report says.

“Given that 55pc of the stock of permanently modified defaulted loans made a full repayment in December 2013, more needed to be done before the arrears issue is resolved,” the economic paper states. Read more

The survey signals that hiring is now at its strongest level since mid-2007.

Despite increased activity and hiring, company confidence was marginally softer, KBC bank and Chartered Accountants Ireland said in a report published yesterday.

“The marginal decline in the business sentiment index may be disappointing but it isn’t at all surprising given the dramatic improvement reported in the second half of last year,” said KBC economist Austin Hughes.

“The survey is designed to capture changes in business conditions. So, these results point to step gains of late rather than any seismic change in activity levels. In turn, this reflects the reality of a recovery that is healthy but far from a return to the boom.”

Firms focused on the domestic market still appeared concerned about the future.

Companies complained about lack of pricing power, with 70pc reporting flat or falling prices.
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“Irish companies are reporting steady rather than spectacular increases in output in mid-2014 but this should be seen as the continuation of very healthy growth rather than any pointer to weaker conditions,” said Chartered Accountants Ireland chief executive Pat Costello. Read more

But resilient growth in the bloc’s major economies bar France could not mask the deflationary pressure weighing on the region just two days ahead of a European Central Bank monetary policy meeting.

Markit’s Purchasing Managers’ Index (PMI) for the euro zone’s service industry leapt to 54.2 from June’s 52.8, although that was down from a flash reading of 54.4.

That helped drive up the Composite PMI, which is based on surveys of thousands of companies across the region and is seen as a good indicator of growth, to 53.8 from June’s 52.8.

July’s final composite reading was below a preliminary estimate of 54.0 but above the 50 mark that separates growth from contraction for the 13th month. Read more

Recent forecasts from IBEC, the ESRI and the Institute of Directors in Ireland have all pointed towards growth and 
 an increase in recruitment in 2014.

Our own experience very much reflects this. Hiring is ramping up and we’re seeing an increase in the ‘War for Talent’. In fact, even in the height of the recession a skills gap in many sectors, especially technology, prevailed.

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Across the euro area as a whole banks have relaxed lending standards for the first time since the second quarter of 2007, though the effects have yet to feed through to Irish lenders.

Banks here did not loosen credit standards in the period from the start of April to the end of June, but did see increasing demand for mortgages, 
consumer loans and business loans.

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Argentina is expected to default on its debt within hours after talks with holdout creditors broke down.

As the clock ticked toward a midnight deadline, Economy Minister Axel Kicillof stuck firmly to the government line, repeatedly denigrating the holdouts as “vultures” after two days of intense negotiations.

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Argentina looks set to default on its debts for a second time in less than 13 years as efforts to end an impasse with creditors suing the country before a crucial interest payment deadline appeared to be coming up short.

In an attempt to find a last-minute solution to the crisis, Argentinian officials met with a US court-appointed mediator on Tuesday but they refused face-to-face negotiations with the so-called “holdouts”, owners of bonds the country defaulted on in 2001 who are now demanding payment in full.

 Read more