THE year began with the nation still shivering from the dramatic snowfalls in December — a climatic not helped by data from the Central Statistics Office showing an extra 5,200 people joined the Live Register the previous month, totalling 444,000. The estimated unemployment rate averaged 13.3%, the worst since 1994.
January also marked the first month where citizens felt the full impact of budget changes to tax bands which brought an extra €132,000 people into the income tax net. Even those on relatively low wages faced deductions adding up to thousands from their annual salaries. Twitter explodes with outrage as the adjusted payslips show the harsh new reality of austerity.
*More casualties from the property bust continued to emerge, notably solicitor Brian O’Donnell and his wife, whose borrowings of €457 million to investment bank Morgan Stanley and €235m to German property bank Aareal brought their total debts to €886m. Their portfolio included properties on Killiney’s Vico Road and Ailesbury Road, a lakeside country estate on Lough Corrib and ski chalet in the French resort of Courchevel.
*Art proved one of the more resilient havens for investors as Christie’s auction house announced global sales of €3.64 billion — up a staggering 50% from the previous year. Among the more notable sales was a Picasso entitled Nude, Green Leaves and Bust for €81m, which established a new world record. Irish artists also made news — In Dublin Bay: Portrait of the Artist’s Wife by Sir William Orpen made €1m, the highest price paid for an Irish painting anywhere in the world last year.
*The start of the year also saw ‘f-commerce’ gather pace with more and more firms using Facebook as a business-to-consumer marketing tool enabling geo-graphically focused advertising campaigns.
FURTHER confirmation on Ireland’s property meltdown came with a survey published by PriceWaterhouseCoopers: Emerging Trends in Real Estate: Europe 2011. Calling it “a bubble that’s popped”, the study showed Dublin ranked lowest in all the 27 cities surveyed, including Barcelona, Frankfurt, Hamburg, Milan and Munich.
“In future years we may look back on 2011 as a transformat-ional year for the property ind-ustry,” said Enda Faughnan, real estate partner at PWC Ireland.
*The government’s plan to rescue its banks prompted a warning from the European Commission that even more capital could be needed if the loan losses mounted further. Shortly after the government’s postponement of an injection of €10 billion into the EBS, AIB and Bank of Ireland, a review by the commission focused on possible unforeseen losses that could derail the programme’s projections.
“Were the macroeconomic situation to worsen significantly beyond the scenarios envisaged under the stress tests, further pressures on banks’ asset quality and solvency could call for additional capital injections,” the report stated.
*Mortgage defaults doubled in 2010 and were set to continue into 2011, according to Moody’s. As a result of its tracking of a pool of €40bn mortgages, the agency found that 1.65% of the residential mortgages were delinquent for 360 days in December, up from 1.62% the previous month.
*In contrast to the pervasive economic gloom, Irish Distillers Pernod Ricard reported sales growth of its Jameson brand had increased dramatically in the first six months of its financial year, with volumes growing by 16% to 3.17 million cases, to produce one of its best performances ever.
Quote of the month: “When Micheál Martin announced the recently revamped frontbench, I couldn’t help thinking, ‘how many of you will actually be in the next Dáil?’” Mary O’Rourke gazing presciently into her political crystal ball ahead of the general election campaign.
THAT old adage, ‘how the mighty have fallen’, was certainly the buzz phrase of this month with the news that Sean Quinn (right) had lost his place on the Forbes Rich List. Even in the good times, Ireland’s billionaires could mostly be counted on the fingers of one hand, and the loss of Quinn served only to underline just how all-encompassing the casualties from the downturn really were. While the combined €14bn wealth of Ireland’s billionaires was just a quarter of the fortune held by the world’s richest man (Mexican telecoms entrepreneur Carlos Slim with €60 billion) it still ensured them membership in the ultra-exclusive global club with just 1,210 members. Top of the Irish money tree was Indian-born shareholder in the Tata Group Pallonji Mistry, who holds an Irish passport, with an estimated €6.7bn. Denis O’Brien was next with €3.2bn, and Campbell soup heir John Dorrance was third with €1.85bn. New entry Martin Naughton came next with €1.45bn and Dermot Desmond with €1.2bn.
*THE spectre of inflation was another woe added to Irish consumers with CSO figures showing the cost of living had risen in February at the fastest rate in three years, 2.2%. The increase was largely blamed on health premiums and the after-Christmas sales, and showed a swing from minus 0.2 in January to 0.9 the following month. While analysts were happy that Ireland’s rate was still well below that of other EU countries, they did concede that it added “another burden” for consumers.
*Ireland’s favourable corporate tax was top of the agenda for the incoming government. Any changes to the rate to appease detractors in the EU would be “economic suicide” according to Minister for Agriculture Simon Coveney.
“We will not allow a situation where we are bullied into submission on the corporate tax rate issue,” he declared. He did have at least one EU ally who seemed to understand why the low rate was so important to Ireland. Jean-Claude Juncker, chairman of the group of finance ministers, said: “I’m not happy with the idea that some governments obviously find some pleasure in torturing Ireland in the meetings and outside. I don’t like this way of dealing with serious problems.”
GOOD economic news started the month, with figures showing exports rose by 6% in 2010 from €84.2bn to €89.3bn. Overall trade figures were up 8% to €162.7bn, with imports unchanged at €45.5, giving a surplus of €43.9bn. Exports to the US, at €20.7bn, accounted for 60%, with those to Germany, €7.2bn, up 21%.
While petroleum and pharmaceutical products were up by 78% and 15% respectively, transport and computer equipment exports were down 66% and 30%.
*Even the most esteemed businessmen can be touched by the whiff of scandal, it seems. David Sokol, the heir apparent to Warren Buffet at Berkshire Hathaway, was forced to resign after it emerged he had bought stock in a company he was negotiating to buy. Sokol, who was chairman of Berkshire’s MidAmerican Energy Holdings and chief executive of NetJets, had bought over 95,000 shares in Lubrizol just before targeting the company for a possible takeover. The share hike on the news of the takeover by a Buffet company would have yielded him around $3m.
*This month saw the National Asset Management Agency seize a number of properties belonging to Derek Quinlan, the former revenue official turned property developer, after he had failed to repay debts. The properties, located mainly in upmarket areas of Dublin like Raglan and Ailesbury Roads plus Fitzwilliam Square, were now valued at much less than their purchase price. One of the houses in question was bought for €8m and would now fetch no more than €3m.
*With the glorious sunshine of April making it the best weather of the year, sales of Easter eggs were well up on previous years. The market, worth an annual €24m, proved immune to recession economics as consumers cleared the shelves of their favourite brands.
Quote of the month: “I’m 74 years old and even though I may be a bit of a rascal, 33 girls in two months seems to me too much even for a 30-year-old.” The inimitable Italian prime minister Silvio Berlusconi responding to accusations of involvement with call girls and other nefarious carry on.
A REPORT from the Economic and Social Research Institute revealed that government employment agencies can be as much of a hindrance as a help in assisting jobseekers, and were even counter-productive in some cases.
It suggested that people in receipt of state benefits be compelled to actively look for work or take training courses in return for their entitlements. The report found that those receiving dole were less likely to return to employment than those receiving welfare.
Fás programmes did not measure up well, with the report finding 10% to 14% of those who participated in their training schemes having only a “probability” of finding work.
*ullow Oil continued its expansion in Ghana with a deal valued at €212 million to buy out the interest of another stakeholder.
Aiming to hit an output of 100,000 barrels a day, Tullow’s deal increased its interest in the West Cape Three Points area by 3.5% to 26.4%, and extend its holding in the Jubilee field by 1.75% to 36.5%.
Tullow also bought the Nuon Exploration Group from Scandinavian conglomerate Vattenfall for €300m in a move that will increase its presence in the North Sea through stakes in 25 licences in 30 natural gas-producing fields off the Dutch coast.
*Te thirst for champagne by China’s growing middle class encouraged Moët Hennessy to develop a new vineyard to cater for this new demographic in a region of Inner Mongolia.
While the fizz produced there will not be marketed as champagne it should have a dramatic impact on future sales of the company, which houses established brands like Dom Pérignon, Veuve Cliquot and Krug.
Quote of the month: “To all those who have suffered as a consequence of our troubled past, I extend my sincere thoughts and deep sympathy. With the benefit of historical hindsight, we can all see things which we would wish had been done differently or not at all.” Queen Elizabeth II, at the historic state dinner at Dublin Castle, during her four-day visit to Ireland.
DESPITE significant improvements in cost competitiveness over the last two years, business costs are still too high in Ireland,according to the NationalCompetitiveness Council (NCC). While prices have fallen since 2008, business-related costs, such as legal fees and rents, remain relatively expensive.
Dr Don Thornill, NCC chairman, said: “Costs in Ireland are moving in the right direction... but we cannot rest on the oars. If we are to face down emerging threats, such as increasing global oil prices and a resumption of inflation, Irish policy must deliver outcomes which embed lasting, structural reform.”
*The perilous state of English football was a topic of debate among fans and financial analysts alike as the combined losses in the Premier League and Championship topped €600 million, according to Deloitte.
Four main clubs carried the majority of the losses — Manchester United, Liverpool, Chelsea and Manchester City — with only seven clubs in both leagues managing to make pre-tax profits. With new rules from UEFA coming into force in 2012 requiring break-even, it is expected those clubs without the backing of wealthy owners will come under major pressure.
Players’ wages came in for particular scrutiny, having grown by 5% last season in the Premier League to more than €1.6 billion, and by 6% in the Championship to €426 million.
*With the dramatic job losses at Dell’s Limerick facility in 2009 still fresh in many minds, the tech giant has turned things to the good in 2011 with more employment being added to the 2,300 at work at its operations in Dublin and Limerick.
Announcing 150 jobs this month, ICT Ireland, the IBEC group representing the hi-tech sector, said: “With nine of the top 10 global technology firms having a significant presence here and exports of over €50 billion per annum, Ireland remains a prime location for technology investment. In 2011 alone, 1,900 new jobs have been announced.”
NO DOOM or gloom to report at Dubarry, the Galway-based leisurewear manufacturer, which reported a 44% increase in export sales. Pretax profits were up 13% to €1.95 million on revenues of over €20m in 2010. A slowdown in domestic sales was more than compensated by the company’s strong overseas performance across the EU, Britain and the US. While the famous Dubarry range of deck shoes is no longer made in Ireland, but in Portugal and Asia, the improved performance would likely result in more jobs in the years ahead. Looking to achieving a 15% growth this year, the company established in 1937 seems set for fair sailing.
* Digital downloads continued to clash with traditional music sellers, as evidenced by the €136m annual loss at HMV.
In an effort to combat its “disappointing and unsatisfactory” trading, the company decided to reconfigure its chain toward a more digital-friendly environment. Aiming to change its 150 stores to allow at least 25% space dedicated to consumer electronics, HMV hoped to counter declining CD sales and predictions that the traditional music market would continue to contract by up to 25% by 2015.
*Jobs, as always, remained the focus of the new Government with Taoiseach Enda Kenny announcing plans for 10,000 new positions in the financial sector by 2016.
Describing it as a “credible estimate”, he said the sector was well positioned to build on its reputation as a global leader in financial services. “The 10,000 is well within achievement within five years, based on rebuilding that reputation, based on Ireland having achieved its reputation as a global financial centre,” he said.
The new jobs would come from focussing on the areas of international insurance and reinsurance; funds and asset management; green-based financial services; Islamic finance; and cross-border pensions.
Quote of the month: “This singing comic book is no longer the ungodly, indecipherable mess it was in February. It’s just a bore.” New York Times theatre review of the official Broadway opening of the U2 backed musical Spider-Man: Turn Off The Dark.
THE old stock market adage “sell in May and go away”, took a few extra months to happen this year — and with a vengeance. The first Friday of August saw global markets plunge as efforts to stem investor worries about the euro debt crisis went unheeded.
With the major stock indices having fallen over 10% this year, the Ftse, Dow and Dax dropped 3.4, 3.6 and 3.3 respectively. The Dublin market followed suit with 3.5. Despite the ECB’s efforts to calm the situation by offering bank funding and a revival of its bond purchase programme, Spanish and Italian bonds continued upwards into danger territory at 6.26 and 6.3.
Regardless of the EU’s attempts to calm the situation, the growing crisis showed signs of spreading.
*One car maker led the pack this summer as Audi Ireland saw its sales rise over 22% in the first six months of the year. Building on similar results from 2010, the Audi Group recorded an operating profit of €2.5 billion in the first half of the year — a staggering 90.9% growth.
The company broke another record with sales of 652,970 automobiles in the period.
*Tackling its massive debt saw Manchester United file for a planned listing on the Singapore Stock Exchange. Hoping a public offering could raise as much as €698 million and help to calm the clamour among their fans over a burden that continued to rise.
The club’s 2010 results revealed an overall debt of €602m, and a net operating loss of €100.3m. The Far East flotation does represent a potentially big payday for the club with an estimated 195 million of its 320 million fans living there.
*One man bucking the general downward trend in the restaurant industry was celebrity chef Richard Corrigan, whose British businesses made a €550,000 profit in 2010.
A Co Meath native, Corrigan has never been backward about coming forward — particularly in his occasional swipes at the quality of Irish food. He closed his Dublin restaurant, Bentley’s Oyster Bar Grill, located close to the old Anglo Irish Bank headquarters on St Stephen’s Green, due to rent problems. Or, as he put it: “We ain’t fucking Manhattan.”
SHAMROCK ROVERS made history, and a potential financial bonanza, by reaching the group stage of the UEFA Europa League. The club could be looking at €200,000 on the turnstiles plus a €1 million fee from UEFA for reaching this stage as well as €70,000 for each draw and €140,000 for every group win. The club turnover last year was €2.1m.
*Car sales for August showed new registrations fell 36% to 3,242, compared to the same month last year. Car sales for the first eight months of the year were up by 7% at 84,412, according to figures from the Society of the Irish Motor Industry, with Toyota remaining the top-selling brand with a 13.1% market share on sales of 11,082, followed by Volkswagen with 12.4% on sales of 10,441.
Ford took third place with an 11.9% and sales of 10,062. At the prestige end of the market, Audi led the way with sales of 3,175, just 25 cars ahead of BMW. Mercedes was third with 1,835.
*Almost 10,000 readers of Britain’s Guardian newspaper gave Ireland the thumbs up as a fantastic place for a holiday or short break, in a survey undertaken this summer.
*Dublin provided the backdrop for a new Bollywood blockbuster, Once There Was A Tiger, filming in the city this month. The production will ultimately be released in 24 countries worldwide, reaching over 100 million people.
This is the first time a major Bollywood production has been shot here and Tourism Ireland is confident that it will help to significantly boost awareness of the island of Ireland.
Quote of the Month: “Some developed country officials sound like their woes are just their business. Not so. In 2008, many people said they did not see the turbulence coming. Leaders have no such excuse now. Dangerous times call for courageous people.” World Bank president Robert Zoellick impressing the need for decisive economic action among leaders of developed nations to the gathering crisis.
THE Government announced plans to introduce an awards scheme recognising outstanding contributions made to the country by members of the diaspora.
Tánaiste and Minister for Foreign Affairs Eamon Gilmore told the 250 participants at the second Irish Global Economics Forum at Dublin Castle it was now time for the state to honour contributions — but not an ‘honours system’ as in Britain.
*Steven Jobs, technology visionary and Apple Inc chairman and co-founder died of pancreatic cancer aged 56. “Apple has lost a visionary and creative genius, and the world has lost an amazing human being,” said his longtime deputy Tim Cook.
Almost single-handedly, Jobs helped transform what became California’s Silicon Valley from fruit orchards into the hothouse of global IT advances.
*The increasing bureaucracy of dealing with delinquent accounts has necessitated 10% of the Bord Gáis workforce being redeployed to cope with more householders struggling to pay their bills.
“In 2007 we had 12 people dealing with credit control, that number is now 90 — roughly 10% of our workforce,” said chief executive John Mullins. 132,700 customers, 16% of the company’s customer base, are in arrears for an average of €270.
*Seven Irish companies watched the launch of the first two Galileo navigation satellites — in which they had played a direct role.
Through Ireland’s membership of the European Space Agency, these companies, with support from Enterprise Ireland, were able to secure contracts from ESA worth €3.5 million to develop and supply components for the Galileo satellites and the ground-based network of the satellite control system.
*The downturn in Europe and America’s economies began to impact on China’s industrial output as figures showed September exports had slowed to their lowest expansion in seven months — down to 17% compared with 25% in August.
With the economic turbulence from the euro debt crisis sending ripples across the globe, China, as the world’s largest goods exporter, began to feel the direct impact of the slowdown in Europe. China’s trade surplus was down to €11.6 billion in September, compared with €13.5 billion in August.
AT ONE of the most closely watched political debuts for many years, Mario Draghi’s first press conference as incoming president of the European Central Bank (ECB) revealed the man as tight-lipped and low-key. Getting the news of a rate cut in first, he invited questions from the floor.
What would his style be, asked one journalist. “Continuity, credibility and consistency,” he told the assembled press pack.
Not wasting a word, unlike his verbose Gallic predecessor, Draghi batted the expected enquiries on Greece leaving the euro and the ECB buying more bonds with a polite but firm statement of intent: “We are not forced by anybody, we are independent. We make our own judgment. That’s it.”
*Irish companies announced contracts and strategic alliances worth over €15 million on a trade mission to South Africa — a country that seen an increase of 25% of Irish exports last year.
Among the announcements made during the trade mission were: Waterford based EirGen Pharma, announced a deal of €3m in a partnership agreement with Equity Pharmaceuticals, a leading South African company; and Azotel, the Cork based technology company, announced a €3m contract with an SA distributor.
*Irish bookmaker Paddy Power found the going soft in its Irish operations this year, with just a €5m profit for the first half of 2011 — compared to €35m for the year five years ago.
With 161 betting outlets in Britain and 210 in Ireland, present trends suggest the British operation will be first past the post when yearly totals are added on December 31.
*Northern Rock, the bank infamous for having prompted the first run on a British bank for 150 years, was bought by Richard Branson’s Virgin Money for €894 — a long way off its estimated valuation of €25 billion some years ago. The Virgin boss had tried to buy Northern Rock back in 2007, only to see the €25bn deal fall through.
Quote of the month: “We have seen how little it profited so many men to gain the whole world.” Seamus Heaney on the lessons of the Celtic Tiger.
CLOSING out the year on a positive note, Enterprise Ireland’s end-of-year statement reported record levels of exports were achieved and employment in Irish exporting companies stabilised in 2011. While the economic context was challenging, Irish companies increased exports and are now using this renewed confidence to aggressively target opportunities in international markets. Enterprise Ireland estimates that that the final export figures for 2011 will exceed the pre-recession record levels of 2008.
*Tourism Ireland launched details of its marketing plans to promote Ireland overseas in the coming year with a plan to welcome over 9 million visitors by 2015. The new campaign, Jump Into Ireland, will launch next month in 22 markets around the globe through TV, radio, press, cinema and online advertising to an estimated annual audience of 60 million potential visitors worldwide.
Major events such as the grand finale of the Volvo Ocean Race (below) 2011-2012 taking place in Galway and the annual Notre Dame-Navy American football game at Dublin’s Aviva Stadium. In the second half, Tourism Ireland will promote The Gathering 2013 to the 70 million people who feel linked by family, friends or otherwise with Ireland.
*Despite the spread of the Occupy Wall Street movement across the USA and Europe, American census data showed that half of the nation is either in poverty or slipping close to it. Food stamps are becoming the currency of choice in the US supermarkets with 430,434 Americans added to the roles last month.
Quote of the month: “Frankly, I’d have them all shot. I would take them outside and execute them in front of their families. I mean, how dare they go on strike when they’ve got these gilt-edged pensions that are going to be guaranteed while the rest of us have to work for a living?” Top Gear’s Jeremy Clarkson gives his candid thoughts on Britain’s striking public service workers.