Syndicated Archives - Page 2 of 240 - Devine Accountants

Chinese firms’ investment in Ireland surges by 200pc to €87m

Investment by Chinese companies here has surged more than 200pc over the past year, amid trade tensions between Beijing and Washington, while Irish companies are seeking a greater foothold in the world’s fastest-growing major economy.

According to analysis from consultants Baker McKenzie and Rhodium Group, completed Chinese investment here hit $100m (€87m) in 2018.

The rise is partly down to the announcement by WuXi Biologics that it would invest €325m over four years, Baker McKenzie said.

The surge in investment here came amid sharp falls elsewhere, as trade tensions between the United States and China ratcheted up thanks to tariffs on billions of dollars of imports from China, as well as new restrictions on investment.

Overall, completed Chinese investment into Europe and North America fell to just $30bn last year, down from $111bn in 2017.

Some countries in Europe have also started to impose greater scrutiny on Chinese deals, fearing that investment in some sectors is being made to win access to technologies that China will then use to bolster its domestic industries at the expense of companies in the EU.

Irish companies have also embarked on a push to win markets in China with the Dublin Chamber leading a delegation of 20 companies to Hong Kong in a five-day mission that started at the weekend.

“Huge opportunities exist in Hong Kong for Irish firms, especially as the country also provides a gateway into the increasingly lucrative Chinese market,” said Dublin Chamber CEO Mary Rose Burke.

Article Source:

Petrol prices at the pump fall to 16 month low – AA

The AA’s monthly fuel prices survey found that the average cost of a litre of petrol hit a 16 month low in January.

The AA said the average cost of a litre of petrol is 132.9 cent – the lowest level since August 2017 – and down from 136.9 cent in December 2018.

Diesel costs an average of 127.9 cent a litre at the pumps, the lowest price recorded by the AA since April of last year.

Among the main driver for the cheaper pump prices has been the significant drop in the cost of crude oil.

Having floated between $75 and $85 a barrel for much of 2018, crude oil has largely remained at a cost of between $55 and $65 since December.

But the AA again highlighted that the excessive tax placed on both petrol and diesel means motorists are still paying more than they should be for their fuel.

It is estimated that 64.42% of the cost of each litre of petrol sold in Ireland is made up of various taxes. 57.71% of the price of diesel at the pumps also comes from government taxation.

“For many people in Ireland, particularly those living in rural areas, the car is their only means of reliable transport and as a result crucial to their ability to get to work and continue to contribute to the Irish economy,” commented Conor Faughnan, AA Director of Consumer Affairs.

“The current levels of taxation only serve to punish these people for the failure of the current governments and their predecessors to improve public transport options across the country,” Mr Faughnan added.

Article Source:

AIB: give landlords a break and extend help-to-buy scheme

AIB has called on the Government to level the playing field between private landlords and their institutional counterparts.

The State-owned bank also urged Finance Minister Paschal Donohoe to extend the help-to-buy scheme beyond 2019 as soon as possible to avoid an “inevitable scramble” by prospective buyers ahead of October’s budget.

In its second annual report on the Irish housing market, it also warned that construction labour has become a “scarce resource” and that it will become a major challenge for new housing supply.

AIB’s head of real estate finance, Donall O’Shea, said the bank plans to fund around 5,500 residential units this year, up from 4,700 in 2018.

“In line with 2018, this report shows that – to make real change in the level of supply in the short-term – viability, labour, policy initiatives and social and affordable housing are key issues,” O’Shea said.

In the report, AIB also stated that the help-to-buy scheme was “working effectively” but that it has had very limited impact on residential property prices. The scheme, which was launched in October 2016, offers a tax rebate on income tax paid, which can be used as a deposit on a newly-built home. It was extended for another year in the budget but is set to expire this October.

AIB said that there was a “notable upswing” in the volume of new homes bought by first-time buyers. The total number of first-time buyers of new homes went from 2,107 in 2016 to 4,387 in 2018.

“An early decision to extend the scheme would avoid an inevitable scramble by prospective buyers to transact in the months leading up to October and would allow developers to plan with greater certainty for 2019 and beyond,” the bank said.

The country’s biggest lender also stated that the Central Bank’s macro-prudential rules were becoming an “increasingly binding constraint”, citing the fact that the proportion of first-time buyers borrowing between 3.25 and 3.5 times their income rose to 31.8pc last year.

The most recent figures from the Residential Tenancies Board have also shown a sizeable drop-off in the number of landlords servicing the rental market. According to the board’s December data, there were 1,778 fewer landlords in 2018 than in 2015.

AIB called for reform of the tax code for private landlords and stated that they should be “encouraged” back into the market. The cost of building a new home was also cited as a significant issue.

Article Source:

Investments that may stand to you in 2019 as economy slows

Investor pessimism is high this New Year. The dismal performance of a number of stock markets in 2018 disappointed many. Trade wars, Brexit and rising interest rates weighed heavily on investors’ minds – and continue to do so. One of the biggest concerns on investors’ minds today though is whether or not we’re on the cusp of a recession.

The current economic cycle, which began in March 2009, has been going on for almost 10 years. This makes it one of the longest stretches of global economic growth on record. “The question I keep getting [from investors] is when will this economic cycle end,” said Davy head of global investment strategy Alan Werlau. “We are moving into a period in 2019 when the economy will still be growing but at a slower, yet healthy, pace.”

Although Barclays believes that investment returns this year won’t be any worse than in 2018, the financial institution is urging investors to be cautious. “Bit by bit, 2018 has turned into a nightmare for global financial assets,” said Barclays in its latest global outlook. “We do not believe financial assets will rebound strongly in 2019. The good news is that 2019 returns are unlikely to be as bad as 2018. At some point this year, the US Federal Reserve will likely approach the end of its interest-rate-hiking cycle. We expect the world’s major economies to still grow at or above trend. On the other hand, global growth should be a little weaker in 2019 than in 2018. After years of positive returns and low volatility in the run-up to 2018, investing is set to become more challenging in the months ahead.”

Barclays is advising investors “to lower their expectations and to be nimble”. “In our view, the best years of the decade-long economic recovery and market rally are behind us,” said Barclays in its global outlook. “We recommend entering 2019 with a cautious frame of mind, with subdued expectations for financial-market returns, and prepared for the higher financial volatility which accompanied the October sell-off to be more persistent than such spikes have proven in recent years.” So against this backdrop of investor caution and slower economic growth, which investments could come up trumps in 2019 and which could disappoint?

Healthcare shares
Barclays describes itself as “cautiously optimistic on US equities” – in particular US healthcare, information technology, and materials stocks. Stockbroker, Davy is also tipping global healthcare stocks. “The sector we like most and which we feel will continue to do well is healthcare,” said Werlau. “Global healthcare stocks are offering fair value. We like healthcare as a sector because it performs well at this point in the economic cycle. We feel healthcare will continue to outperform in 2019 and beyond.” In particular, the shares of healthcare companies specialising in global ageing or global obesity could be worth considering, according to Werlau.

Quality stocks
Investors should increase their exposure to quality stocks (stocks which typically offer more reliability and less risk), advised Werlau.

“When you are late on in an economic cycle [as we are now], the emphasis should be on getting quality stocks into your portfolio,” said Werlau.

Quality stocks typically include companies with good corporate governance; clean and strong balance sheets; and less debt.

Walmart, McDonald’s, Pfizer and Procter & Gamble are some stocks recently tipped by the US financial giant Citigroup as quality stocks worth considering. Some stocks recently described by the investment bank Goldman Sachs as ones which it considers to be of high quality include Alphabet (the owner of Google), PepsiCo and Mastercard.

Companies with strong competitive advantages are also worth considering, according to the Dublin wealth management business Gillen Markets. “Ryanair is one company which has a much lower cost base than all its competitors,” said David Coffey, senior investment adviser with Gillen Markets. “While the airline industry is cyclical in nature, it is also a structural growth story as people continue to travel more regularly.” (A cyclical stock is a stock whose price is affected by ups and down in the economy).

Gold & inflation
Inflation is something investors should watch closely this year – and which could see gold and silver mining stocks do well, according to Coffey.

“With many developed economies already at or close to full employment, inflation may start to edge higher in 2019,” said Coffey.

“We believe that gold and silver miners would benefit if inflation [in Europe and the US] was to move substantially above 2pc. Gold tends to do well when inflation is high and the gold and silver miners are highly correlated with the price of gold and silver.

“We also think the gold miners look like good value at current levels regardless of what happens with inflation – and if inflation does go higher, the goldminers should benefit. “The Philadelphia Gold and Silver Miners Index (a stock market index of 30 precious metal mining companies) is back trading at levels it traded at in 1983. This sector has been out of favour with equity investors for a long time and may appeal to contrarian investors.”

Emerging markets
Some analysts expect emerging market shares to do well in 2019, but others are more cautious.

Emerging markets include the markets of emerging or developing economies, such as China and India. “I think the global economy will do well next year – and in that environment, emerging markets are the one to buy,” said Andrew Milligan, head of global strategy with Aberdeen Standard Investments (ASI). “We like emerging market debt.” Emerging market debt includes sovereign and corporate bonds issued by less-developed countries. Such bonds often carry a lot of risk though. As more than 20 countries are considered to be emerging markets and the performance of each of these countries’ shares and bonds varies widely, do your research if considering investing in emerging markets.

“In our view, investors hoping for a repeat of 2017 – when virtually all emerging market financial assets did very well- are likely to be disappointed in 2019,” said Barclays in its latest global outlook. “Emerging market financial assets in general are unlikely to have a strong 2019.”

China’s slowing exports are likely to be one of the challenges facing emerging market equities this year “but emerging market credit [debt] is likely to be more resilient”, according to Barclays.

Commercial Property
Logistics could be one of the best-performing parts of the commercial property market this year, according to ASI.

“Logistics market conditions are thriving, particularly in fringe locations close to major conurbations where ecommerce is boosting demand,” said ASI in its latest European real estate outlook.

“There is strong demand for ‘last mile’ delivery hubs for retail goods bought online; vacancy rates are low and competition from higher-value land uses is limiting supply [of logistics space] too.”

ASI also believes that investors in private rented accommodation in major European cities could do well this year – particularly in Germany, Austria, Switzerland, Netherlands and the Nordics. It also expects investment returns on prime offices (typically offices based in major commercial centres and close to good transport links) in major European cities (such as Amsterdam, Stockholm, Berlin, Lisbon and Madrid) to be strong.


Concerns about the environmental impact of diesel and petrol — and plans to ban such fuel — have put many car manufacturers under pressure. “We’re wary of auto-stocks around the world because of the pressures on that sector,” said Andrew Milligan of Aberdeen Standard Investments. “From a European investor point of view, one of the big issues they need to think about in 2019 is diesel and slowing car sales.”

Barclays is not that keen on US consumer discretionary stocks (the stocks of companies which produce or sell goods and services that people want — but don’t necessarily need).

Davy, too, is cautious about consumer discretionary stocks. “We have cut exposure to consumer-discretionary stocks, such as luxury brands — as these are the things which people stop buying when things get slower,” said Alan Werlau of Davy.

European shares may not deliver the best returns this year. “EU companies have not been creating good profit growth recently,” said Milligan. “Then, on top of this, there are worries about Brexit and Italy [over its populist government]. Europe has certainly seen a big growth slowdown [in its economy] in recent months. European equities is not the most attractive of markets. One thing to watch this year is how well will the populist parties do — and what that will mean for the monetary union and the European economy.”

Uncertainty around Brexit continues this year — with investors watching if, and how, Britain will leave the EU. Investors in domestic-oriented British companies are likely to be badly burnt regardless of whether the UK Government can secure a deal with EU on Brexit or not, according to Werlau. “If you need to be in the British stock market, the Ftse 100 is the only place to be,” said Werlau. “Avoid the Ftse 350 or domestically-oriented British companies as these are likely to get hit more given the weak sterling.”

There are a number of possible Brexit scenarios that could unfold. One involves a deal between the UK and the EU on Brexit, another involves the failure to secure such a deal, and another scenario is where there is a second referendum on Brexit in which the UK votes to stay in the EU. “If a deal happens, the market will probably rally,” said Werlau. “Sterling will be stronger and people will be happy. That would be a relief — though short-lived. A lot of the uncertainty around Brexit has slowed business sentiment and hurt consumer confidence. Any euphoria that will come [after a deal] will eventually wear off. I wouldn’t expect a strong sustainable rally of sterling or of stock markets.”

Domestic-oriented UK companies would suffer the most in a no-deal Brexit, according to Werlau. “If there’s no deal, sterling will probably get weaker and it will stay weak for a while,” said Werlau. “The Ftse 100 would probably be okay and benefit from the weak sterling. Small- and mid-sized UK companies would probably get crushed at this stage. If we had a second referendum where the UK votes to stay in the EU, you’d get a rally. Sterling would firm up against the euro and the dollar.”

Article Source:

Truck drivers express worries over no-deal Brexit

Irish hauliers are deeply concerned that a no-deal or hard Brexit will lead to unworkable delays at UK ports.

They are already delivering huge quantities of non-perishable goods which are being stockpiled in both Ireland the UK amidst fears of Britain crashing out of the EU.

Speaking on RTÉ’s The Week in Politics on the way to Holyhead in Wales, a number of drivers expressed fears that delays of 24 to 48 hours currently experienced at customs posts on non-EU borders could be replicated at the UK border.

Up to 1,000 Irish trucks travel by ferry from Dublin Port to Holyhead every day – it is the shortest and busiest crossing between Ireland and Wales.

According to the Irish Road Haulage Association, 70% of the haulage traffic leaving Dublin on ferries use the UK as a land-bridge to continental Europe.

On the 8.10am Stena Line ferry to Holyhead, drivers go into cabins and have some rest during the three-and-a-half hour crossing. Shortly before arrival in Wales, some of the drivers make their way to the Truckers’ Lounge for tea or coffee.

Pat Murtagh
In this lounge, the prospect of a no-deal or hard Brexit is a cause of great concern.

Dundalk man Pat Murtagh has been a truck driver for 46 years. A driver with Browne Logistics, he recalls it taking half a day to get through the border between Dundalk and Newry a few decades ago.

“If you were heading to Belfast from Dundalk, which is an hour’s drive and you had to clear customs you may have [had] to add another four hours on top of that depending on the traffic,” said Mr Murtagh.

He believes a hard Brexit will mean lengthy delays and is concerned about planning to go on a given ferry crossing because of delays.

“You could be booked onto the 8am ferry and not get through customs until the 8.30pm ferry is going that evening,” he said.

He said that drivers are paid by the day or by the hour and the extra time taken to clear customs will increase the cost of freight. These increased costs will eventually be passed on to the consumer.

Jason Harker
Another driver in the Truckers’ Lounge was Lancashire man Jason Harker of UK company S&M Transport. He recalls how he had driven lorries into old Eastern Bloc countries outside the EU.

He said: “You could spend two, two-and-a-half, days on those borders and nobody wants to see that in the UK at Dover or Holyhead.”

He pointed out that random spot checks are carried out by customs officials in many other European countries and believes this could be a more palatable alternative plan to having customs posts.

Brendan Dixon, Operations Manager, Dixons International Transport, believes a hard or no-deal Brexit poses a huge threat to Irish hauliers.

He asked: “Where would the 1,000 trucks that come off every day from Ireland into the UK via Holyhead – Where do they go? Where do they park? Where is the customs’ clearance and what type of delay is going to be involved in that?”

Brendan Dixon
Citing the example of a non-EU country, he said his company regular drive into Turkey and it can take anything from 24 to 48 hours to clear customs into that country.

“It is a six-day transit for us to drive from Dublin to Turkey to the border. When we arrive it takes anything from 24 to 48 hours to clear. We would drive in and offload and generally we would come off empty, because of the delay of coming back with a load and having to clear the customs again. It’s not worth taking a load out of it.

“We are better off coming empty into Romania or Bulgaria and loading up back in Austria or somewhere else before coming back to Ireland or the UK.”

In a bid to guard against the risk of major price hikes in a no-deal scenario, some products are being stockpiled.

Mr Dixon said: “We believe that there is a massive amount of stockpiling within Ireland and the UK at the moment. The short lifespan goods are not going to be stockpiled but the long lifespan goods are definitely being stockpiled in the UK.

“The fear for us would be that whether it is a hard Brexit or soft Brexit, is there going to be a fall off in transport or a decrease in our business because these stockpiles are going to have to be used?”

Neil Pepper
There were similar sentiments from Neil Pepper of Kildare-based Road Truck Services. He fears long queues at customs posts in Holyhead.

He said: “There are a few places in Europe where you go to the border checkpoints and you could be sitting there for two or three days. That could be here. We just don’t know.”

All of the truck drivers that spoke to RTÉ were sceptical about the merits of last week’s test running of lorries from an airfield in Kent to Dover in preparation for a no-deal Brexit.

The trial, called Operation Brock, saw lorries directed along the A256 towards Dover in a 32km journey, which should take around 30 minutes.

Mr Pepper said: “That’s not going to mirror what is going to happen. Parking 80 or 100 lorries into an airbase is not realistic. You could double that, triple that, quadruple that given the amount of lorries that are going to go into the likes of Dover. They should have did the test run with 1,000 trucks to see what the impact would be.”

Archie Whitaker
Archie Whitaker, of GK Kelly Transport, who deliver air freight and aircraft engines all over Europe, has been a truck driver for 48 years.

He is concerned about a hard border in case it is “anything like the border I’ve been through in the past 12 months. Like Serbia, that took me 23 and a half hours to go from Serbia to Hungary. I even had to take a nine-hour break on the hard shoulder where there are no amenities for the drivers to stop”.

He pointed out that currently he “can go from here now as far as the Russian border without even being stopped. As long as you keep to the times that you can drive and keep to the times that you can through countries, you have no problem”.

“But as soon as you come through a non-EU country you have to stop and go through all the formalities of customs.”

John Hall
In the Roadking Truckstop in Holyhead, veteran driver John Hall of DG McArdle International Transport envisages another issue for drivers if they end up sitting in queues at UK border crossings.

He says it will be difficult for drivers “to keep our tacographs right with rest regulations, staying within certain driving times and working hours”.

He added: “Hopefully the authorities will see the light and customs can be done online. The British and French and other European countries do spot checks on lorries.I don’t see the need to have checkpoints.”

Doc Watson
Doc Watson, a driver with Michael Dixon International says a hard border and the new advent of customs stops “will crucify us like it was 40 or 50 years ago”.

He recalls being held up for six hours on the Swiss-Italian border two years ago.

The Welsh Government has ramped up its no-deal contingency planning in recent days. A number of sites close to Holyhead in Anglesey have been earmarked to turn into parking sites for lorries in case the port in unable to handle the traffic after Brexit.

As politicians in Cardiff plan for heavy backlogs, Irish haulage firms will pay particular attention to the political events in Westminster in the coming weeks.

They will be united in the hope hope that these backlogs never materialise.

Article Source:

What are the big economic trends on the way in the next decade?

Opinion: here’s how the US economy, Chinese growth, oil prices, globalism, unemployment and Brexit will affect our world

At the start of the year, there is great interest in making predictions. But instead of making short term predictions for 2019, what are some of the big trends which may dominate the next five to ten years?

The US dominance of the world economy is over
The election of President Trump in 2016 was as much a consequence of this development as one cause of it. In 2014, according to some measures, the US ceased being the world’s largest national economy and China is now number one. It is likely that trading relations between these two superpowers will remain strained. In passing, it is worth noting that the Indian economy is also growing very rapidly and probably became larger than the UK in 2018.

Some implications of this trend:
(i) if we are looking for inward investment, we should expect much of it to come from East or South Asia. Similarly, these parts of the world will be the source of growth in tourist numbers.

(ii) protection of intellectual property against espionage coming from some Chinese companies will be a continuing challenge.

(iii) regardless of the final terms of Brexit, we need to aim for wider global markets.

(iv) Trump’s reductions in US corporation tax rates will reduce the mileage which could be expected from any further reductions in this tax in a post-Brexit UK or Northern Ireland.

Oil price volatility will continue
Over and above simple supply and demand factors, what happens will be partly determined by a geopolitical struggle for influence between Iran, Saudi Arabia and Russia. Add to this the growing evidence that the regime in Saudi Arabia is increasingly unstable.

Some implications of this trend:
(i) it would be sensible to seek as much diversity as possible in sources of oil supplies and indeed other energy sources.

(ii) Northern Ireland should at least consider options regarding fracking.

(iii) we cannot assume that the world oil price will necessarily be on continuous and steady upward path.

(iv) if the IPCC forecasts on global temperature rises are taken at face value, they provide a strong case for dramatic decarbonisation. One problem with this is that there is very little appreciation of how radically we might have to alter consumption (much less air travel or eating of beef). Also, it cannot be assumed that the non-fossil fuel technologies will necessarily give us low cost energy supplies.

Nationalism and populism will bring a reaction to economic globalism
During the 1950s to 1990s, many governments around the world were willing to submit to international agreements and rules in the hope that we could all gain by so doing. Now, there is an increasing tendency towards self-assertion. Once again, Trump’s America first exemplifies this but he is far from unique.

Some implications of this trend:
(i) does this mean that a post-Brexit UK trying to make free trade agreements with other countries will be out amongst the wolves? Or does it mean that the UK could play a very valuable role in trying to reverse a global trend towards protectionism?

From RTÉ Radio 1’s This Week, Timothy Garton Ash on how competing political forces across Europe are engaged in a critical battle between the forces of liberalism and populism

(ii) Northern Ireland should expect much less interest from the international community. While there was a lot of interest from the US, EU and elsewhere in the “peace process”, outsiders are now going to be more preoccupied In any case, there may be a sense of boredom about the Northern Ireland problem and an understandable feeling that we need to stand on our own two feet and tackle our issues.

(iii) The end of the Cold War in the 1990s produced something of a peace dividend as most NATO members were able to slash defence spending. Expect defence spending to rise as east-west tensions increase again, which implies higher taxation and lower consumption. On the other hand, it could be good news for businesses making defence equipment.

The end of mass unemployment
One of the surprises of the last decade is the much better than expected employment performance. Existing trends, such as the very contrasting demands for highly skilled and low skilled, will continue. Some sectors, such as manufacturing, food processing and social care, will continue to struggle to find labour. This will be especially so as the tap of supply from the EU is turned down. Will we be able to draw more on the economically inactive?

Northern Ireland will continue to be one of the weakest regional economies in Europe
The level of income per head will remain well below the UK or EU averages with little or no convergence. The UU Economic Policy Centre forecast that Northern Ireland’s economic growth rates over the next five years could be as low as one percent annually or less.

Some implications of this trend:
(i) any long run effect from Brexit will come on top of a longstanding and pronounced weakness.

(ii) Brexit does at least force us to consider whether a “business as usual” approach to the Northern Ireland economy is adequate. It is not. While Brexit could increase the pressure to do some of the hard things which should have been done anyway (e.g. trade with more distant markets, engage with economically inactive and reform support form farming), is there the will to do this?

I apologise if a lot of this appears as unrelenting gloom

(iii) it is sometimes argued that one consequence of the Brexit debate has been that “normal politics” has been suspended – who now talks about how to reform, say, the NHS or apprenticeship systems etc? Indeed, when did Northern Ireland last have normal politics, especially with Stormont suspended for close on two years?

I apologise if a lot of this appears as unrelenting gloom. Some long term trends are favourable – on average, people have been becoming richer and are living longer lives – and such trends will probably continue. At the same time, to be forewarned is to be fore-armed. If we know what the negative trends are, we can try to take steps whether as businesses or individuals to reduce the impact.

Article Source:

Promised reform in insurance sector is ‘incomplete’ – Insurance Ireland

The insurance industry in Ireland has expressed concern about what it calls a lack of urgency in delivering key reforms in the sector that are aimed at reducing claims costs.

Insurance Ireland says promised reform is incomplete and inaction is costing policy-holders.

The call for progress comes exactly two years on from the publication of the first Cost of Insurance Working Group Report.

“Two years ago we cautioned that the publication of the Cost of Insurance Working Group Report in itself would not reduce costs in the market, but the swift implementation of the right policies would,” said Kevin Thompson, CEO of Insurance Ireland in a statement.

“While much important work has been undertaken since, including the findings of the Personal Injuries Commission which established that the average Irish soft-tissue award is now 4.4 times the UK level, the reform of our cost of claims is incomplete.”

Mr Thompson also criticised the absence of a firm timeline for legislation to set-up a Judicial Council and the development of guidelines for the awarding of compensation.

He also said the Personal Injuries Assessment Board Bill, which aims to improve the claims settlement process, has still not passed through the Dáil.

Published in January 2017, the first Cost of Insurance Working Group Report aimed to lead to faster resolution of claims and bring predictability and consistency to the level of compensation awards.

However, the Government has said progress has been made in the area.

It says the average cost of motor insurance has been consistently falling since the middle of 2016, and is down 7.6% in the last 12 months and is 22.7% lower than July 2016.

It says legislation has also recently been passed in the area to give effect to reforms.

Insurance Ireland has said progress is too slow and has suggested that in the absence of a Judicial Council, a contingency mechanism to allow for the judiciary to complete new compensation guidelines should be put in place to help bring down costs.

It has said all those involved in the process of delivering insurance reform have a responsibility to policyholders to maintain a sense of urgency around delivery on the report recommendations.

The calls for action have been supported by members of the insurance industry, including Liberty Insurance.

It said implementation of the reforms are fundamental to ensuring greater stability in the pricing of premiums and to curb insurance fraud.

In particular it called for the immediate establishment of a Garda Insurance Fraud Unit funded by the insurance industry, but independent of it.

It also said ongoing and enhanced education for judges presiding over personal injuries cases is necessary, to ensure greater consistency in the level of compensation awards.

Liberty said an amendment to existing law is also needed to require applicants in personal injuries cases to swear a verifying affidavit that their claims are valid.

It said there should also be civil and criminal penalties in circumstances where it is subsequently found that such claims are false or exaggerated.

The demands came as Allianz Ireland revealed it had challenged over 1,500 claimants in the courts last year.

It estimates that nearly half of all cases it contests are potentially fraudulent and it estimates that an average saving of €20,000 per claimant is made in cases it has won.

The insurer said it now has over 500 suspicious cases awaiting trial dates.

The Minister of State with special responsibility for Financial Services and Insurance says he does not agree with statements made by Insurance Ireland and that there has not been any “foot dragging on the half of the government.”

Michael D’Arcy said it is just four months since the Judicial Council Bill was recommended.

He said he had hoped the bill would have passed through the Dáil by the end of 2018, but as that has not happened he has decided to pursue other options that would enable the implementation of CIWG recommendations.

Mr D’Arcy said he hopes an interim judicial board can be established.

This board, he said, would be able to carry out the work of the council and re-balance the level of awards being paid out.

He added that he believed the current pay outs were too high.

He said he did not accept that a fall in the cost of motor insurance was as a result of an EU investigation, adding that the government has been working on the issues for over two years.

Article Source:

Consumer sentiment unchanged in December – survey

Consumer sentiment was unchanged in December from November, as concerns about the economic outlook appeared to be offset by improved personal finances and end-of-year spending.

The Irish economy is on course to be the best performer in the European Union for the fifth consecutive year.

But concern about the vulnerability of the economy to an unruly British exit from the bloc has weighed on consumer sentiment.

The KBC Bank Ireland/ESRI Consumer Sentiment index stood at 96.5 in December, unchanged from the previous month.

The index had hit a 17-year high of 110.9 last January.

The report’s authors said the stability appeared to be as a result of consumers’ “considerable difficulties in assessing both the likelihood and possible impact of potentially important changes in their circumstances in the year ahead.”

Sentiment appears to be at a tipping point depending on whether Britain crashes out of the European Union without a deal on March 29, they said.

Only 26% of respondents said they expected a stronger economy over the next 12 months compared with 32% expecting weaker conditions.

This marks the first time there have been more pessimists than optimists on this question since 2013.

However, 26% of consumers reported an improvement in their household finances over the past year compared with 20% reporting a deterioration.

“The headline figure looks steady, but the details suggest that consumers are really struggling to make sense of what’s happening in the economy,” KBC Bank Ireland’s chief economist Austin Hughes said.

“There’s a split between the macro influences, which are deteriorating rapidly, and micro or more personal finance influences that are still improving, even if it’s unevenly,” the economist added.

External influences, especially Brexit, are weighing on consumers’ minds at present and as the deadline looms, those fears have grown.

Mr Hughes says that consumers are now worried about just how bad things could get in the coming months. That has meant that – for the first time since August 2013 – more consumers are pessimistic about the outlook for the Irish economy in the next 12 months.

At the same time, however, they are also looking more favourably upon their current personal financial position – partially due to them making a more positive reassessment of the modest improvements enjoyed over recent years, with the Christmas spirit perhaps having an impact as well.

“26% say things have gotten better over the past year, 20% say things have gotten worse, so it’s not a boom for consumers – but it is a little bit better,” Mr Hughes said. “Ahead of Christmas they probably felt “eat, drink and be merry for tomorrow we Brexit!'”

However he is quick to add that the cautiousness that has been a hallmark of the Irish consumer in recent years remains.

“There’s no sense that consumers are throwing away anything they’ve earned over the last year,” he said. “It has been a struggle for many and we’re seeing that reflected in retail reports, not just in Ireland but in the UK as well.”

Normally this kind of scenario is blamed on a level of uncertainty, which does certainly exist at present. However Mr Hughes says that the influence of Brexit means that there are realistically only two paths down which things can go this year.

On the one hand, with a hard Brexit, the public’s worst fears may become true. However some kind of a deal – or even a kicking into touch – should see sentiment improve significantly.

“Here it looks like consumers are either going to move to the left or the right,” he said.

“It’s either a sense that things will continue on a reasonably positive trend of improving employment, improving incomes – maybe not great but okay. Or else Brexit is going to come, and nobody knows how awful that might be for the average Irish consumer, and that’s what worrying them.

“It’s either a Brexit bounce or a Brexit bump over the next couple of months,” he added.

Article Source:

Ireland’s forestry industry comes together to meet Brexit challenge

Ireland plants almost 30 million trees a year, or 80,000 trees a day.

The country’s forest and timber companies have competed very successfully against each other for many years, but since its biggest export market is the UK, Brexit has acted as a catalyst to bring the industry together to meet the challenge.

Forest Industries Ireland, the new trade association for the forestry and timber industries, has been officially launched today. FII is a new business sector within Ibec, the national business organisation. Almost all the major forestry and timber companies in Ireland are members of Forest Industries Ireland. They are drawn from across the industry and include all the largest timber processors as well as companies involved in the establishment and management of forests.

Mark McCauley, Director, Forestries Industries Ireland, said the industry is now maturing, with 21,000 forest owners all over the country. “The trees that they have been growing over the last 40 years are now reaching maturity, so there is huge growth in supply from the private forest estate, and that requires a bit more coordination.”

The industry is forecasting major growth in the coming years as the supply of raw material from Irish forests will double in the period 2017-2035. It estimates that it will double the industry’s combined turnover from €800 million today to €1.6 billion in that time.

Brian Murphy, Chief Executive of Balcas, a timber and renewable energy producer, based in Enniskillen in Northern Ireland. Balcas processes a million tonnes of trees from Ireland and Scotland every year.

“We make sawn timber which we export to Great Britain, and we also make renewable energy. We take the sawn timber out of the tree first, then you are left with bark and saw dust and woodchip,” Mr Murphy explained. “We burn some of that, and we generate enough electricity for all of the houses in Fermanagh and Tyrone. Using the heat left over from the electricity-making process, we dry more sawmill residue and make them into pellets, which in turn displaces fossil fuels to provide heat to people’s homes.”

Mr Murphy, who is the inaugural Chairman of Forest Industries Ireland, said the industry is “hugely sustainable”. “The ingredients for our industry are sun, carbon dioxide, rain and land, and it just repeats and repeats. The timber is a crop that is managed very carefully to maximise the volume of timber that is being used on the land, and to maximise the environmental benefit for the grower and the people of Ireland.”

The forest cover in Ireland was 1% at the time of Independence, it’s now 11% – still far short of the European average which is 33%. The tree most commonly grown is Sitka Spruce, and 30% of the trees grown by Coillte are broadleaf.

Britain will always be the industry’s largest market because they are the second largest net importer of timber in the world. Britain is on our doorstep and the industry produces a heavy product.

Fergal Leamy, Chief Executive of Coillte, which manages 51% of the land that is under forestry, said the industry has come together to meet the Brexit challenge.

“Tarriffs are not the big issue for us. There is zero per cent tarriffs on timber products, 7% on MDF,” he said. “The biggest issue for us is being sure that we can get our product to our customers. Some people think about timber and say, ‘Well it’s not a problem, it’s not perishable’, but our customers need that product quickly.”

Forest Industries Ireland is working with Government, Revenue, Customs, to make sure that those flows continue. “To be fair, we have an awful lot of preparation done to ensure that we can do that,” Mr Leamy said.

Article Source:

Enterprise Ireland warns 600 companies vulnerable to a hard Brexit

The number of people employed in companies backed by Enterprise Ireland (EI) rose last year to a record high of more than 215,000.

But the agency has warned that Brexit poses serious challenges for indigenous Irish businesses, particularly those involved in exporting, and those effects had yet to be seen

“However, as the March 29 deadline approaches, and uncertainty continues, we would anticipate that 2019 will be a challenging period for some Irish exporters,” said Julie Sinnamon, Enterprise Ireland’s chief executive.

“Ongoing doubt about the outcome of the Brexit negotiations, currency volatility, transition arrangements, customs/logistics and potential delays in investment activity are key concerns for exporters,” she added.

Ms Sinnamon said that in the event of a hard Brexit, there are in particular 600 Irish companies employing 25,000 staff who would be particularly vulnerable because of their exposure to the UK market.

In total, 18,846 new positions were created in Enterprise Ireland supported firms during 2018, leading the overall number to rise by 4.4%.

However, when jobs lost are taken into account, the net growth in employment at the businesses was 9,118.

The strongest increases were seen in the lifesciences, construction and electronics sectors, mirroring the strength of these areas in the wider economy.

The meat and food sectors also saw solid growth.

Geographically, the new roles were spread across the country, with almost two thirds created outside of the capital.

With huge uncertainty still facing Irish businesses about what form, if any, Brexit will take, Enterprise Ireland says it was involved in a significant amount of work getting firms ready for all eventualities during the last year.

It said €74m in funding was approved for 535 of the most Brexit-exposed companies, while more than 1,000 companies also received Brexit interventions, including one-to-one consultancy engagements for contingency planning, training, and innovation.

“While 85% of our clients have taken Brexit actions, our continuous efforts to support our clients to innovate, diversify and compete will ramp up so that Irish businesses are equipped to mitigate against the fallout of Brexit and build on the strength of the 2018 results,” Ms Sinnamon said.

The State agency will also widen its overseas presence during this year in an effort to help Irish firms diversify into new markets by opening 14 new foreign offices in 18 priority markets.

These include France, Germany, Denmark, the US and Australia, while staff numbers in existing overseas offices will also be boosted.

The results have been welcomed by Minister for Business, Enterprise and Innovation, Heather Humphreys, who said they were a great achievement, especially in the context of Brexit.

Article Source: