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New home completions up by 23% in first quarter – CSO

New home completions up by 23% in first quarter – CSO

The number of new homes built in the first quarter of this year rose by 23.2%, the latest figures from the Central Statistics Office show.

The CSO said a total of 4,275 new dwellings were finished in the first three months of the year, compared with 3,470 completions the same time last year.

Today’s figures show that once-off builds increased by 13.1% – from 971 to 1,098 – in the first quarter on an annual basis.

The number of scheme homes rose from 2,023 to 2,564, an increase of 26.7%, while the number of completed apartments jumped by 28.8% to 613 compared to the first quarter of 2018.

The CSO noted that homes in schemes made up 60% of all new completions in the first quarter of the year, while 25.7% were single dwellings and 14.3% were apartments.

The CSO said the main data source for these statistics is the ESB Networks’ new domestic connections figures.

However it is accepted these figures overestimate the number of new homes and the CSO has adjusted for this overcount by using additional information from the ESB and other data sources.

The number of new home completions was highest in Dublin at 1,488 followed by 1,072 in the Mid-East.

Together, Dublin and Mid-East made up 60% of all housing completions in the three month period.

Outside of Dublin, there were five counties which had 100 or more new scheme dwellings in the three month period – Meath, Kildare, Louth, Wicklow and Cork.

The highest number of once-off builds at a regional level was 190 in the West.

Meanwhile, Dublin saw 487 new apartments completed, making up over three-quarters of all new apartments completed in the first three months of the year.

The CSO also noted that the average new dwelling size fell by 7.6% in the first quarter of 2019 from 2018, but it added that the figure is provisional and will be revised as more homes are completed during the rest of the year.

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Mild weather so far this year boosts Irish retailers

Mild weather so far this year boosts Irish retailers

A new report shows that the value of retail sales rose by 4.7% in the first quarter of the year, boosted by a mild winter and early spring weather.

The Retail Monitor, from Retail Ireland – the Ibec group that represents the sector – said there was a “modest uptick” in consumer confidence coming off the back of some respite from Brexit uncertainty.

While the first quarter figures are robust, Retail Ireland stressed that Ireland had been under a blanket of snow and was suffering the disruptive effects of Storm Emma in the first quarter of last year.

The Monitor shows that while sales are up across almost all categories of retail, the trends of discounting and the continuing shift to online are also evident.

This is especially evident in categories such as computers and electrical goods and department stores.

Retail Ireland said the main driver in the supermarkets and convenience stores sector continues to be competitive action with the battle for market share between multiples very intense and the slower but continuing growth of discounters also contributing to downward pressures.

A buoyant economy has been good news for the convenience sector, which is also in growth, it added.

The first quarter represented a solid quarter for the pharmacy sector with strong January sales.

Retail Ireland noted that beauty categories were strong across Valentine’s Day. But seasonal healthcare was soft with the exception of hay fever, which saw an early boost due to milder weather.

It added that the timing of Easter and Mother’s Day was challenging in March, but the quarter remained moderately positive year on year.

Meanwhile, the DIY and hardware sector saw strong growth, helped by the early kick off of the gardening season and this year’s more favourable weather conditions.

But sales of fashion and footwear continue to fluctuate, affected by issues such as increased competition from online UK shopping platforms and changes in the value of sterling.

Retail Ireland also noted that the price of both petrol and diesel at the pumps increased from 137.6 cent and 127.1 cent in April last year respectively to 142.3 cent for petrol and 137 cent for diesel in the first quarter of this year.

Thomas Burke, Director of Retail Ireland, said that after a rocky fourth quarter of 2018, in which trade ebbed and flow almost by the day, retailers will be hoping that a level of consistency to trade can be found in 2019.

Mr Burke said that retail sales patterns in the second half of 2018 were heavily impacted by Brexit related commentary and the extension to the negotiating period until October seems to have calmed nerves somewhat.

“The daily game of brinkmanship is no longer leading news bulletins, and for hard-pressed Irish retailers this is good news,” Mr Burke said.

“On the back of this we have seen an uptick in consumer sentiment as people’s worst fears of a crash out Brexit, have been allayed, at least for the moment,” he added.

Looking ahead, Mr Burke said that many businesses will have budgeted against the performance of Summer 2018.

“For those categories that are particularly reliant on good weather to drive footfall and sales, clearly this will prove challenging. With no guarantee of a similar prolonged spell of fine weather retailers will have to be creative if they are to achieve such heights once more,” he stated.

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World Bank’s €1.5 billion sustainable bond to be listed on Euronext Dublin

World Bank’s €1.5 billion sustainable bond to be listed on Euronext Dublin

The World Bank has raised €1.5 billion from a 10-year Global Sustainable Development Bond, which will be listed on the Euronext Dublin exchange.

It will also be listed on the Luxemburg Stock Exchange.

The funds were raised from institutional investors around the globe to finance the World Bank’s sustainable development activities.

This is the World Bank’s first 10-year euro global bond in ten years, and its first global euro bond since August 2018.

The timing of the new bond bond coincides with a workshop being held in Dublin, which brings together bond issuers, investors and other key market participants for action on Sustainable Development Goals (SDGs).

The event highlights Ireland’s role in sustainable finance efforts to channel more institutional savings towards sustainable projects around the globe.

It follows Dublin’s recent designation as a European hub of the Financial Centres for Sustainability (FC4S) network and the National Treasury Management Agency’s first green bond.

Minister for Finance & Public Expenditure and Reform Paschal Donohoe said that working together with the development and financial community is a key part of the government’s strategy.

“We welcome the World Bank’s new sustainable development bond to raise awareness for SDGs that are aligned with our priority areas of prioritising gender equality, reducing humanitarian need, climate action, and strengthening governance,” Mr Donohoe added.

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Fee increases will be critical for Irish banks – S&P

Fee increases will be critical for Irish banks – S&P

Increasing fees and commissions will be critical for Irish banks in the coming years, in order to offset pressure on the difference between the amount of interest they earn versus what they pay out to those lending them money.

That’s according to ratings agency S&P Global Ratings, which says it does not expect banks here to be able to expand their net interest margins further, given competitive movement in the markets, low interest rates, and gradual build up in banks’ stock capital buffers.

In a research note on the Irish banking system, the agency says the concentration in real estate and extent of existing tracker mortgages means the quality of the sector’s loan book is typically weaker than in many other EU states.

It says the use of money set aside for losses has in the past helped to support losses, but this benefit is not likely to continue.

It also cautions that it does not expect a material improvement in earnings this year, because of limited revenue diversification and high cost bases

S&P says capitalization remains at levels that are relatively strong.

However, the agency says capital is set to decline a little as loan books expand and dividend distribution policies remain the same..

Overall though Irish banks have demonstrated stability, the organisation claims, despite internal and external challenges.

Their credit profiles have improved materially in recent years, it says, as a result of better economic conditions, placing them in a stronger position to absorb future shocks, like Brexit.

Non-performing loans will continue to fall this year, it predicts, and near-term profitability to remain stable.

As a result, it says short term upgrades to Irish banks are most likely to be based on their improved additional loss-absorbing capacity, it says.

It claims Bank of Ireland has demonstrated a superior track record around the quality of its assets compared with other peers in the market here.

As a result, it says, the positive outlook for the bank suggests it may change the rating on Bank of Ireland to bring it in line with the higher ratings on its international peers.

On Ulster Bank, it says, the positive outlook reflects that of its parent company, the Royal Bank of Scotland.

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Euro zone economy accelerates in Q1 as Germany rebounds

Euro zone economy accelerates in Q1 as Germany rebounds

The euro zone economy accelerated quarter-on-quarter in the first three months of the year, the EU’s statistics office confirmed today.

This was thanks to a rebound in the biggest economy Germany and the end of a technical recession in Italy.

Eurostat said the economy of the 19 countries sharing the euro expanded by 0.4% quarter-on-quarter in the three months from January to March, the same as its initial estimate, after 0.2% growth in the last three months of 2018.

Year-on-year, the euro zone grew by 1.2% in the first quarter, also as previously estimated, the same rate as at the end of last year.

The quarterly acceleration was mainly thanks to Germany, which rebounded to 0.4% growth from zero growth in the previous three months.

Italy also helped as it rallied from a technical recession of two consecutive quarters, when its economy contracted each time by 0.1%. It expanded by 0.2% in the first quarter of 2019.

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Almost €4.5m stolen in invoice redirect fraud this year

Almost €4.5m stolen in invoice redirect fraud this year

Almost €4.5m has been stolen in invoice redirect frauds since the start of the year, according to gardaí.

More than €2m has been stolen in the last month alone, they sad.

Under the fraud criminals send emails to businesses purporting to be one of their legitimate suppliers with the supplier’s new bank account details and a request to change the account to one that will ultimately benefit the criminals.

These requests can also come by way of letter or phone call.

The Garda National Economic Crime Bureau says various companies including sports clubs, accountants, hospitals, car dealers and pubs have redirected payments to fraudulent accounts solely on receipt of an email.

The bureau says it has recovered more than €1.8m, but has once again warned businesses not to rely on emails to change payment details and verify the request before making payments

Last year Detective Chief Superintendent Patrick Lordan of the Economic Crime Bureau said this type of fraud had been going on for some years.

He said the criminals use emails that look like the real suppliers’ address but with some slight difference.

Often the fraudsters use students’ and young people’s bank account details by offering them a fee to allow use of their accounts for a few days.

Earlier this year an investigation was launched by the bureau into these so-called money mule accounts.

According to the Garda National Economic Crime Bureau, there has been a dramatic and worrying increase in CEO and invoice redirection fraud in the past few months.

Since January 132 cases have been reported with a total of over €4.4m stolen, €1.2m has been recovered but €3.2m is still missing.

Gardaí say the thieves succeed because while the person who makes the payments in a company is a senior manager, the person who can change the bank details for payments is often a junior clerk.

The fraudsters are also credible, they often create a false sense of urgency and the businesses do not verify the criminals’ details before handing over the money.

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Trade war escalation puts Europe’s shaky economy back on alert

Trade war escalation puts Europe’s shaky economy back on alert

The US and China are taking another swing at global sentiment, which is bad news for Europe as the economy starts to find its feet after a torrid year. In a week that was supposed to bring progress in trade talks, President Donald Trump boosted tariffs on $200bn of goods and threatened more. China said it will be forced to retaliate, though it hasn’t yet given details.

The escalation will have a global impact, but for the euro area it brings to life one of the “pronounced” risks highlighted this week by the European Commission in its latest (gloomy) economic assessment. The region is also facing its own US deadline: Trump is due to decide by May 18 whether to slap levies on car imports, though the date could be extended. “We’re at a very fragile position in the global economy; we’re seeing an industrial recession in most parts of the world,” said Zurich strategist Guy Miller.

“The uncertainty this creates means the global trade situation, which is already fragile, is going to be very vulnerable.”

The US-China setback follows figures suggesting the euro-area economy was starting to stabilise. First-quarter growth was better than anticipated and surveys of activity bottomed out after tumbling through 2018. In Germany, industrial production and orders grew in March.

But confidence remains fragile, with a commission measure for the eurozone at the weakest in more than two years. “A quarter of our members have exports to the US that were already affected by these ridiculous tariffs,” said EU Chamber of Commerce in China president Mats Harborn. Increasing tariffs to 25pc “will prove extremely damaging to those companies, and the collateral damage will ripple around the globe”.

The latest tit-for-tat is likely to worry EU leaders. They agreed on a trade pact with Trump last year and are working to prevent more tariffs on EU products.

Moreover, Europe’s worries could be moot: The US-China talks may ultimately succeed. A deal would help support the view of a better second half for the euro-area economy. Failure, though, “would mean persistent (trade) uncertainty and flat-lining growth rather than a return above potential next year,” Bank of America Merrill Lynch analysts said in a note.

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Construction activity growth quickens in April despite Brexit concerns

Construction activity growth quickens in April despite Brexit concerns

Construction activity rose sharply last month with April marking the 68th consecutive month of stronger construction activity in Ireland.

The Ulster Bank Construction Purchasing Managers’ Index – which tracks changes in total construction activity – rose to 56.6 in April up from 55.9 in March.

Ulster Bank said that housing activity was the strongest performing sub-sector as growth in residential activity continues to show welcome signs of rapid expansion.

Commercial activity also increased last month, though at the slowest pace in six months. But for the eighth successive month, civil engineering activity declined, though at a weaker pace than in March.

The index shows that new orders continued to rise sharply amid reports from companies of improving demand conditions in April.

But some companies also cautioned that Brexit uncertainty was weighing negatively on customers.

Some firms also said they had raised their input purchases in order to mitigate any supply disruptions resulting from Brexit.

Ulster Bank said that in contrast to the faster rise in new business, employment growth in the Irish construction industry eased slightly during April.

Despite this, the rate of job creation was sharp and quicker than the long-run series average with companies indicating that extra staff had been hired in order to keep up with customer demand.

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Revenue collected 26% more corporation tax last year

Revenue collected 26% more corporation tax last year

The amount of corporation tax collected by the state last year increased by 26% to €10.4 billion, according to the Revenue Commissioners’ annual report.

The increase was driven by higher payments from manufacturing companies and increased payments from big multinational companies.

The report also shows that the share of corporation tax paid by the top ten corporate taxpayers now accounts for 45% of all the corporation tax paid, up from 40% the year before.

Almost €1 in every €5 of tax collected by the Revenue Commissioners came from corporation tax last year – an extraordinarily high proportion by international standards.

The amount paid surged by 26%, underlining again the volatile nature of this tax head and how vulnerable the public finances have become to the risk of a sudden downturn in corporation tax payments.

There are 164,000 companies in Ireland, but just 100 of them pay almost three quarters of the corporation tax collected. Foreign owned companies paid 77% of last year’s corporation tax take.

In total, Revenue said it collected net Exchequer receipts of €54.6 billion for last year, up €4 billion on 2017.

There were increased receipts for almost all taxes and duties including Income Tax, up 6.6%, VAT up 7% and Corporation Tax.

Niall Cody, Revenue’s chairman, said that continued strong levels of timely, voluntary compliance rates of over 90% across all taxes confirm the reality that the vast majority of individuals and businesses pay the right amount of tax, on time.

Mr Cody acknowledged taxpayers’ engagement, and that of tax practitioners and agents, in achieving the very strong compliance rates seen again for 2018.

Today’s report also reveals that 400 additional customs officers have been hired of the estimated 600 required for Brexit duties.

Revenue said the delay to Brexit has enabled them to complete additional training, adding that as Customs and Revenue is an integrated service, staff can be redeployed from one are to another rapidly.

This means that in the event of a sudden Brexit, additional staff can be redeployed to cope.

The Commissioners appealed once again to firms that have not applied for an EORI number – which is free and facilitates customs declarations when trading with the UK after Brexit – to do so.

They warned that Brexit could happen suddenly before the 1 November deadline.

Revenue also said it it was “confident that our systems will successfully handle the increased transaction levels arising as a result of Brexit”.

Last year the authority processed 1.6 million customs declarations through their electronic systems.

It said it believes customs import and export declarations could rise to as many as 20 million a year after Brexit, due to the amount of trade the country has with the UK.

Looking ahead, Niall Cody said that it is very important that Revenue supports compliant taxpayers by identifying risks and tackling non-compliance in all its forms.

“We continue to be alert to, and pro-actively respond to, the risks arising from the changes in economic and business environments both nationally and globally,” he added.

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UK economy expands on Brexit stockpiling

UK economy expands on Brexit stockpiling

The UK economy grew by 0.5% in the first quarter, boosted by companies stockpiling ahead of Brexit, official data showed today.

British gross domestic product expansion outpaced the 0.2% seen in the final three months of 2018, the Office for National Statistics said in a statement.

The ONS added that UK manufacturing jumped 2.2% in the first quarter with recent surveys showing Brexit-facing companies building inventories, said to include key car parts and medicines.

The first-quarter growth figure was meanwhile in line with market expectations.

The strong manufacturing performance offset a slowdown in services output to 0.3%, the ONS data showed.

The Bank of England last week raised its forecast for UK economic growth this year, as stockpiling offsets lower business investment elsewhere ahead of Britain’s departure from the European Union.

UK economic activity was given a temporary boost as companies rushed to build up stocks of components and goods before the original March 29 Brexit deadline, the Bank of England said.

The Bank of England is predicting UK GDP expansion of 1.5% this year, up from its previous growth estimate of 1.2%.

Following today’s data, the pound was little changed as first-quarter output of 0.5% had been widely forecast following the recent BoE update, analysts said.

Britain is due to leave the EU by October 31 after two delays this year triggered by MPs rejecting a divorce deal Prime Minister Theresa May had struck with the bloc.

The Centre for Economics and Business Research said that businesses in the first quarter had purchased more goods to keep in storage in the event of a no-deal Brexit affecting supply chains and the ability for businesses to the buy goods they need for production.

The Bank of England, meanwhile, sees the boost to growth from stockpiling as only temporary, forecasting that UK GDP would slow to about 0.2% output in the second quarter of this year.

Many analysts agreed with Joshua Mahony, senior market analyst at IG trading group, who said that “while manufacturing is enjoying a bullish moment, there is a strong chance that such strength could be short-term given its reliance upon Brexit stockpiling”.

Reacting to the latest GDP data, British finance minister Philip Hammond described the UK economy as “robust”.

“The economy has grown for nine consecutive years, debt is falling, employment is at a record high and wages are rising at their fastest pace in over a decade,” the minister said.

The Treasury said that the UK economy was forecast to grow faster than Germany, Italy and Japan in 2019.

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