Ireland’s Business recovery is early and less robust than some would have you believe
With the property sector starting to boom again and more jobs on-stream, wages are rising and bankers are popping champagne.Kyran FitzGerald is experiencing a bout of deja vu.
In the capital city, plenty of cash is being flashed. Traffic is returning to levels last seen six years ago. There are dark rumours that people are getting ruder again.
Animal spirits are up. I overheard an estate agent gabbling excitedly in numbers with a friend, eyes bulging with delight. Some are turning up late for appointments as diary entries bulge. Vacant shop premises have become a lot scarcer in the past year or so. Cranes are starting to appear close to St Stephen’s Green. There are reports of growing shortages of skilled construction staff.
Architects are back designing while fretting about regulatory changes that leave them much more exposed to legal actions. The developer class has returned. Johnny Ronan of Treasury Holdings fame is back developing a large office block on Burlington Road close to the renamed Burlington Hotel — now known as DoubleTree by Hilton. Bernard McNamara is on site less than 1km away. He is back home just 12 months after being discharged from bankruptcy, having shed €1.2bn worth of debts.
Profiles are kept lower these days. No more helicopter rides to race meets and hugging and petting of politicians in the Fianna Fáil tent.
In the City of London, financiers are enjoying a boost in their bonuses: A survey of 1,500 people by recruitment firm Astbury Marsden reveals a 21% jump in bonuses for senior staff to nearly £125,000 (€160,000). In the case of people working in private equity, the bonus will amount on average to £145,000, or 115% of basic salary. The champagne is no longer on ice.
The boss of Irish-Swiss plc Aryzta, Owen Killian, has had a pay rise of around 40%: He is taking home €5m when bonuses, incentives, and pension contributions are included. Killian will soon be moving to a building formerly occupied by the Belgian embassy in fashionable Ballsbridge — and he’s planning a large expansion of the Victorian mansion, most of it taking place underground.
However, some of Ireland’s newest occasional residents put Killian rather in the hapenny place when it comes to net worth.
John Malone, founder of Liberty Global, has apparently just acquired the Castlemartin residence of Tony O’Reilly. Mr Malone has a net worth estimated at $7.5bn (€6.2bn). According to Bloomberg, he has saved $200m in taxes through adroit tax avoidance activity, Recovery, both global and domestic, has greatly benefited the asset rich.
A combination of quantitative easing and excess demand has rapidly pushed up property prices in the major cities, particularly London and New York. Recovery has spread to Dublin and gradually beyond the capital.
This asset price bounce may benefit landlords, but it is hitting low earners hard in the pocket. According to Daft.ie, rental prices rose in November by 14.5% a year. Rents in the city are now up by 30% on their low point in 2012 and are less than 10% behind the peak levels of 2007.
Availability for many has dried up, with just 27,000 properties to rent compared with 47,000 on average in 2011.
Nationwide, renters pay over 30% of their income to their landlord. In Dublin, renters spend 35% of their average income on accommodation, with 42% being faced with an increase in the past 18 months (compared with 18% in the rest of Ireland.)
According to housing group Nabco, one quarter of tenants express concern about losing the roof over their heads. Eurostat, meanwhile, reports that Ireland has one of the largest gaps between high- and low-income earners in Europe, with just over one in five workers earning less than two-thirds the median hourly wage, compared with an EU average of 17% in this position.
Graduates have borne the brunt of the recession along with the low- skilled. According to the Higher Education Authority, average pay for college leavers fell almost 12% between 2007 and 2012 to around €23,800, cancelling out gains achieved after 2004. The pay of arts graduates fell by 19% to below €20,000 whereas business graduates earned almost €24,000.
There are few signs yet of a rebound, though the Society of Chartered surveyors is reporting skills shortages in the sector. The use of internships has grown, with the UK Sutton Trust estimating that one in three interns are working for nothing.
Globalisation’s effects have not been confined to workers in old-style manufacturing. Increasingly, the middle classes too are feeling its impact. According to Payscale.com, 30% of ‘millennials’ — people born after 1981 — are underemployed (or involuntary working part time), while almost one quarter have had to move back home at one point or other, being saddled with college fees.
A much higher proportion than in previous generations state that they want to own their own businesses.
In retailing, many employees still do not have the luxury of knowing how much they will earn or when they will work in a given week. The Mandate trade union is engaged in a confrontation with Dunnes Stores over the store’s treatment of zero-hours workers.
Underemployment in retail has risen from 92,000 in 2008 to 147,000, according to CSO figures reported in Industrial Relations News. In other words, employers have been handed much greater bargaining power, though many are struggling in an environment of cut-throat competition.
IT workers have bucked the recession trend and have had pay increases in recent years. A senior software engineer can expect to earn around €55,000, with software developers and engineers taking home €37,000 to €39,000. This compares with around €31,000 for graphic designers and office managers, and almost €33,000 for civil engineers.
In the private sector, pay increases in well-established private sector companies have been running at around 2% a year. However, the effects of the Haddington Road agreement mean total earnings per hour continued to fall into 2004, according to the Nevin Institute.
The total public pay bill has fallen from €17.2bn to €14.2bn, with a 32,000 drop in numbers since 2008 (following a rise of 73,000 between 2000 and 2007).
“Pay restoration” is now the mantra of the public sector unions: In 2015, they will be setting about gaining their share of the action.
There could be a few fireworks over the horizon, though pragmatists such as Impact leader Shay Cody will be seeking a return to a form of social partnership lite that recognises both budgetary realities and the need to boost the living standards of ordinary workers.
Ireland’s business recovery is young and a bit less robust than estate agents, union militants, or government PR meisters would have you believe.
VAT income soars as extra €3.5bn in tax brought in last year
The tax take last year was €3.5bn larger than in 2013, so the latest Irish Exchequer Returns shows.
Reflecting the recovery in the economy, €41.2bn was collected in tax during 2014 – beating the targeted figure of €40.04bn.
VAT receipts were €413m, or 3.8%, better than forecast, signaling improving domestic demand and consumer sentiment, according to Exchequer Returns for December released this afternoon.
Last month, VAT receipts were €100m, or 43.6%, above target at €331m, although the Department of Finance said December was a ‘non due’ month, signaling it had lower expectations of what would be filed.
Income tax for the year was 0.7% better than targeted at €17.16bn.
On a monthly basis, the tax take in December was €114m bigger than targeted, or 3.8%, at €3.13bn.
The deficit at the end of December had narrowed to €8.18bn, down from €11.5bn in the same period last year.
This is €1.4bn better than what was expected when Budget 2014 was delivered in October of last year, thanks to increases in tax and non-tax revenue.
Public spending, at €42.2bn, is 2% higher than targeted.
Current spending at €39.02bn is €638m higher than expected, driven by overspends in Health of €649m.
Capital spending was up €137m year-on-year and €204m above target.
Finance Minister Michael Noonan said the numbers show an underlying improvement in the Irish economy.
“Overall, the Exchequer returns show that the tax base continues to grow in line with targets and provides a solid foundation going into 2015.
“Budget 2015 is designed to support this recovery and I would expect that this strong exchequer performance will continue into 2015.”
A breakdown of the Exchequer figures showed increases in income tax and VAT of 9% and 8% respectively compared to the take for 2013.
Mr Noonan said this was a direct result of more people being at work and more money being spent.
Brendan Howlin, Minister for Public Expenditure and Reform, said spending was being managed in line with targets.
“On foot of the better than expected tax revenues, Government agreed to provide some additional funding to support the continued delivery of health services,” he said.
“Around 100m euro extra was spent on capital projects around the country, such as the storm damage repairs arising from the severe storms earlier in the year.”
Analysis of the tax take showed income tax, including the universal social charges, was up 8.9% on 2013 figures to 17.1 billion euro while VAT was up 7.9% to 11.1 billion euro.
Corporation tax was up 8.1% to 4.6 billion euro while excise duties were up 2% to 4.9 billion euro.
Stamps were up a massive 25.9% to 1.7 billion euro for the year, in part thanks to the revival of the property markets in some areas and alongside that boost 491m euro was collected in local property tax.
The message from the two ministers as the figures were published was that the country’s public finances are under control.
In a joint statement, they said: “Overall, the Exchequer performance in 2014 is real evidence of recovery, and job creation throughout the year.
“Stable public finances are an absolute necessity for a growing economy and job creation. As we move into 2015 people will begin to see the increases in their pay cheques due to measures announced in the recent budget.““““““““““
“The priority now is to continue to get more people back to broaden and strengthen the recovery in 2015.”
A two-year wait now for clean water in the west of Ireland?
Thousands of households in the west of Ireland are facing a further two years of having to boil their tap water before its safe to using it.
Irish Water has said the situation is “entirely unacceptable” and insists dealing with the problem is now a priority.
Over 1,000 people in the Williamstown area of Co Galway have been unable to use their water without boiling it since October when traces of cryptosporidium were found in the public supply.
The parasite can cause stomach upset, fever, and diarrhoea, the very young and the elderly are most at risk.
Irish Water said it needs to decommission the Williamstown Water Treatment plant and connect the village and surrounding area to the Lough Mask Treatment plant in Co Mayo.
Lough Mask supplies the Ballyhaunis public supply 20km away and it is planned to extend the existing pipeline to Williamstown.
The extension work has yet to go to tender and the company admits that the job will not be finished until the end of next year.
Sweet-free Tesco Checkouts in Ireland to help with the battle of obesity
Experts have said that the introduction of a ‘sweet-free’ checkout in one of the country’s largest retailers is a positive move in Ireland’s battle on childhood obesity.
Tesco will this month remove sweet and chocolate products from the checkouts in all of their 148 stores around the country. And Professor Donal O’Shea describes this as a “really positive development” which will be “a part of the solution”.
“It will help making the healthy choices easier,” said Professor O’Shea, who is the head of the obesity management clinic in St Columcille’s Hospital, Loughlinstown, Co Dublin.
Tesco will be among the first retailers to make this move here and they said it is part of their plan “to support a healthier Ireland”.
“It’s a small but very important acknowledgement of the role of industry in helping solve our obesity crisis,” Prof O’Shea added.
He said he would like all supermarkets to implement the same policy.
Overweight people ‘face taunts and ridicule’
As we face into the first full week of 2015, and with many already struggling with our new year’s resolutions to get fit, a study has revealed the most frequent humiliations faced by overweight people.
Being insulted by shop assistants, ignored by bar staff, mocked by passers-by, ridiculed by the opposite sex, and photographed by teenagers are part of the frequent taunts overweight people face, according to research in Britain.
Up to 40% of the 2,573 slimmers questioned in the Slimming World study said they faced judgment, criticism, or humiliation at least once a week.
It included people winding down car windows to shout abuse, passengers refusing to share a seat on public transport, men in nightclubs feigning romantic interest, and teenagers taking pictures or videos on their phones.
Even being a paying customer did not stop comments on food choices from supermarket staff, laughter from shop assistants when asked for clothes in a bigger size, and feeling humiliated as bar staff serving slimmer customers first.
However, weight discrimination does not motivate people to lose weight, the study found.
Could a 200-year-old whale offer clues to humans to live longer?
Joao Pedro de Magalhaes (above picture) and his team at the University of Liverpool sequenced the genome of the bowhead whale, the longest living mammal on earth. The team wanted to understand why they live so long and don’t succumb to some of the same illnesses as humans do earlier in life.
“One of the big mysteries of biology is understanding species differences including species differences in aging,” Magalhaes told CBS News.
“For example, mice age 20 to 30 times faster than human beings and we don’t know why … Even primates which are closely related to us age considerably faster than human beings,” he said. “There has to be some genetic basis to why humans age slower than chimpanzees for instance which are very genetically very similar to us. Likewise, there has to be some genetic basis as to why bowhead whales live so long and appear protected from diseases.”
With a 1,000 times more cells than a human, the whale should have a much higher probability of cell death and disease. It doesn’t.
In their findings published in the journal Cell Reports, the team found as many as 80 candidate genes that may help protect the whale from cancer or contribute to it being the longest living mammal on earth. The team found that the whales have genes related to DNA repair, as well as those regulating how cells proliferate, that differ from those found in humans.
“We know DNA damage and DNA mutation are important for cancer. So when we find genes related to DNA repair and DNA damage responses, we think maybe this could be involved in longevity and disease resistance of the bowhead,” Magalheas said. “In that sense, you don’t find a fountain of youth in the genome but you find some promising leads.”
There is a huge industry searching for that elixir which could help humans live longer. Some research has gone into finding what is called longevity genes that could lead to new drug therapies while other research promotes such things as exercise and healthy eating to extend your life.
Two groups which funded most of the whale research — the Life Extension Foundation and the Methuselah Foundation — are seeking that magic potion. Life Extension focuses on such things as hormonal and nutritional supplements to fight aging while Methuselah is heavily invested in tissue engineering and regenerative medicine “to create a world where 90 year olds can be as health as 50 year olds, by 2030.”
Methuselah’s co-founder and CEO Dave Gobel said it invested in the whale research as part of its “hypothesis that the best way to find out how to become longevity outliers is to study those who already are genetic outliers within mammalian species” and then find “what genetic complexes, pathways seem most common among these outliers and to explore what they do, how they act, and what if any advantages can be derived from them to apply in humans.”
While the whale study offers some hope, Magalheas was quick to point out that it will be years before they know whether any of these genes will lead to new drugs or treatment for humans. There won’t be any bowhead whale supplements on store shelves anytime soon, he joked.
“The ideal scenario would be to take a gene from the bowhead and put it in mouse and see if that mouse is protected from cancer and see if that mouse lives longer,” he said. “Those are quite expensive experiments. We don’t have money to do it yet but that is something we would like to pursue.”
More likely, Magalheas is hoping to “take human cells and modify the human genes to resemble those of the bowhead and see if that has noticeable changes in DNA repair at the cellular level.”
Aubrey de Grey, the SENS Research Foundation’s chief science officer and one of the leading voices on extending human life, said the “biology of aging badly needs studies like this.”
“The field was revolutionised over 20 years ago when mutations were discovered that greatly postpone aging by emulating the metabolic response to famine, but that avenue has not delivered as much medical progress as hoped, and many of us are now pessimistic that it ever will,” de Grey said. “Therefore, it is of high priority to look in other ways for simple genetic variations that underlie differences in longevity, and the approach taken by (co-author Michael) Keane et al. is among the most promising.”
Along with studying longevity, the team is hoping the whale genome sheds some light on why these mammals are so big.
“The bowhead’s genome is the first among large whales to be sequenced, so this new information may help reveal physiological adaptations related to size that we have not been able to study in any great detail before,” Magalhaes said.
Dublin Zoo had a record-breaking year in 2014
A record number of visitors took trips to Dublin Zoo last year, with just over the million mark, in fact some 1.076 million visits were reported.
The final footfall figure for 2014 surpassed previous years’ and reached an all-time high of 1,076,876 visitors.
The 2014 footfall figure means Dublin Zoo’s status is Ireland’s most popular family visitor attraction.
Leo Oosterweghel, director of Dublin Zoo says they are “thrilled” with the numbers.
“We are absolutely thrilled to have reached the one million visitor mark for the fourth consecutive year and recorded the highest visitor numbers in the Zoo’s history. We would like to thank all friends and supporters, old and new, who helped us to achieve such fantastic figures”.
Over the course of 2014 Dublin Zoo welcomed over 30 new arrivals including two red panda cubs, two Rothschild giraffe calves and numerous meerkat pups. The birth of two endangered Asian lion cubs Kuno and Kyna was also called “hugely significant” for the Zoo.
In 2014 the popular TV show The Zoo aired on RTÉ One and The Zoo Christmas Special was among the top ten most viewed shows over Christmas.
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