Cork Chamber Economic Bulletin Q1 2013

7/28/2019 Cork Chamber Economic Bulletin Q1 2013

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poudy ponod by AIB

Economic Outlook

National Policy

Inuence

Results o Q1

Economic Survey

Prioritising key

inrastructure

projects in Cork

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wrs r yur usssply tra ts prt tratal

economic BulletinAPRiL 2013. iSSUe 14

tatsonor Healy, Chie Executive

[email protected]

obhan Bradley, (Acting) Policy & Research

Manager

[email protected]

islinn Stanton, Policy & Research Executive

[email protected]

d us

www.rar.

Recent Positive

Developments10

Newly released CSO data shows that onan annual basis, real GDP increased by

0.9% in 2012. This represents a second

year o successive growth ollowing three

years o decline in GDP between 2008 and

2010. GNP also showed an increase o

3.4% when compared to 2011.

The latest Exchequer Statement, released

by the Department o Finance at the end

o March, shows that the Exchequer decit

at the end o Q1 2013 stands at 3,695

million which is 568 million lower than

the same period in 2012. For the montho March, the Exchequer decit was

2,758 million compared with a decit

o 2,190 million in March 2012. This

includes 934 million in Eligible Liabilities

Guarantee (ELG) payments associated

with the liquidation o the Irish Bank

Resolution Corporation (IBRC, ormally

Anglo Irish Bank).

According to the most recent Exchequer

returns, tax revenues amounted to 3,001

million in March, a 6.1% increase on thesame period last year. Three o the big

our sources o tax revenue Income, VAT

and Excise are ahead o the same period

in 2012, while Corporation tax was also

up year-on-year when compared to last

year, when adjusting or the once o 251

million receipt received in January 2012.

Income tax in March was 5.6% up onthe same month last year and is 0.7%

ahead o prole. VAT receipts recorded

cumulative growth o 0.2% (8 million)

year-on-year but a decrease o 3.0% (41

million) on a monthly basis. Excise duties

at 990 million are up marginally (0.8%) -

on the year. However, when compared to

March 2012, there is a slight decrease o

0.6% (2 million). On an underlying basis,

corporation tax recorded year-on-year

growth o 16.5% (26 million) and was

2.8% above prole to end March

O the smaller tax heads, stamp duty

has perormed above expectations

recording receipts o 33 million, a

22.9% (6 million) increase on March last

year. Capital Acquisitions Tax (CAT) and

customs are broadly in line with last years

perormance, with a combined all o

approximately 6 million. Capital Gains

Tax (CGT) was down 1 million (12.9%) or

the month and down 86 million (55.2%)

cumulatively, primarily due to the once

o nature o some large payments inFebruary 2012.

March 2013 saw the rst receipts o the

Local Property Tax with 1.3 million

receieved into the Exchequer.

natal & Rale outl

Growth orecasts or 2013 and 2014 are summarised in Table 1 below,

Date of Forecast 2013 2014

Department of Finance December 2012 1.5% 2.5%

Central Bank of Ireland October 2012 1.3% 2.5%

IMF December 2012 1.1% 2.2%

European Commission November 2012 1.1% 2.2%

ESRI September 2012 1.3% 2.3%

Source: Department o Finance, April Bulletin 2013


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Unemployment:

The latest seasonally adjusted unemployment rate rom

the Quarterly National Household Survey (Q4 2012) is

14.2%. There was an annual increase in employment o

0.1% or 1,200 in the year to the ourth quarter o 2012. This

brought total employment in Ireland to 1,848,900. This

compares with an annual decrease in employment o 0.2%

in the previous quarter and a decrease o 0.5% in the yearto Q4 2011.

Figures or March 2013 show that there were 59,187 people

on the Live Register in Cork City and County, a decrease o

6.0% over the year (Figure 1).

Figure 1: Live Register Cork City & County March 2013

The Government published the Action Plan or Jobs 2013 in

February which contains 333 measures or implementation

in 2013 by 16 government departments and 46 agencies to

improve supports or job-creating businesses and removethe barriers to employment-creation across the economy.

The plan contains seven Disruptive Reorm measures to be

implemented in partnership with industry partners which

include a ocus on big data, ICT, trading online and energy

efciency. Reaction rom the Chamber Network to this

plan is on Page 5.

Ination:

Consumer prices, as measured by the CPI (Consumer Price

Index), increased by 0.8% in the month o February. This

compares to an increase o 0.9% recorded in the same

month last year. Prices on average, as measured by the CPI,

were 1.1% higher in February 2013 when compared with

February 2012.

Euro area ination decreased to 1.8% in February, a 0.2%

decrease rom the January (2.0%) gure in 2013. The EU

Harmonised Index o Consumer Prices (HCIP) increased

by 0.8% in February 2013, compared with an increase o

1.1% increased in February o last year. Prices on average,

as measured by the HICP, were 1.2% higher in February

compared with February 2012.

Figure 2 Ination

Source: CSO, March 2013

The volume o retail sales increased 0.3% in February 2013

when compared with January 2013. The overall KBC/ERSI

Consumer Sentiment Index decreased rom 64.2 in January

to 59.4 in February.

Exports:

Exports in Ireland alongside high levels o oreign direct

investment meant that exports in Ireland equated to 108%

o GDP in 2012. However, according to the Quarterly

National Accounts (Q4 2012), there was a 3.8% all in the

volume o goods exports in the ourth quarter, ollowing

year-on-year declines in each o the previous quarters.

The AIB Economic Research Unit reports that exports were

aected by the double-dip recession that hit the UK andEurozone economies in 2012, as well as a all in pharma

exports ollowing the expiry o some patents. As a result,

export growth decelerated rom 5.7% year-on-year in the

rst quarter o 2012 to under 2% in the second hal o the

year. This resulted in GDP growth slowing down in the

second hal o 2012.

The Eurozone economy is expected to contract by 0.5%

again in 2013, and growth in the UK is orecast to remain

muted at about 0.5%. The external environment will re-

main difcult or Irish exporters in 2013. However, global

growth is orecast by the IMF (4.1%), OECD (2.3%) and

others including the World Bank (3.3%) and the European

Commission (3.9%) rom 2014 onwards including modest

improvements in the European economy. The AIB Econom-

ic Research Unit anticipates that Irish export levels should

increase as a result.


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Eurozone Outlook:

Eurostat estimates that GDP in the Euro area ell by 0.6%

during the ourth quarter o 2012, compared with the

previous year while GDP also ell by 0.6% in the year as a

whole. The ECB has cut its growth projections or the Euro-

zone economy. GDP is orecast to contract by 0.5% in 2013.

Since 2011, the eurozone economy has altered going back

into recession in the nal quarter o the year. The economy

continued to contract throughout 2012 and indications are

that Q1 2013 will represent the sixth consecutive quarter o

contraction.

Figure 3 Euro Area GDP

Unemployment in the Eurozone is at a record high o

12%. The unemployment rate has risen by 1% in under a

year and over 2% since mid 2011. Unemployment in the

peripheral states continues to increase with Spain and

Greece now experiencing unemployment o over 26%.

Ireland is one o the ew countries in the Eurozone to see

unemployment all in the year to February, down to 14.2%

rom over 15% in the same month last year.

The Eurozones Purchasing Manager Index (PMI) averaged

48.25 in January/February, showing an increase on the Q4

2012 average level o 46.5, while the ECs economic senti-

ment index rose or the ourth month in a row in February

reaching 91.1, well above its low o 84.3 in October.

According to the AIB Economic Research Unit, the pace o

contraction in the Eurozone economy eased considerably

in Q1 2013. Given the trend in lead indicators, the econo-

my may stablise in the second quarter beore commencing

a modest recovery in the second hal o 2013. Overall GDP

looks set to contract by around 0.5% in 2013 or the second

year in a row.

The ECB has kept the main renancing rate at 0.75% since

July 2012. A urther rate cut continues to dominate meet-

ings o the Governing Council, however, no reduction has

been agreed to date. The BOI Economic Research Unit sug-

gests that the ECB will lower the rate at the end o Q2 2013,

yet this prospect is likely to keep the euro, which weak-ened urther against the dollar ollowing a decision on the

Cypriot bailout, under pressure on the oreign exchange

market.

Global Outlook:

The ninth review o Irelands EU-IMF programme took

place at the end o January and involved a detailed

assessment o scal, nancial and structural reorms. The

completion o the Q4 2012 programme shows that 190 o

the commitments attached to the programme have been

ullled on time and 84% o the unding has been drawn

down. The ocus remains on exiting the programme this

year so that Ireland can re-enter the nancial markets.

In January, the IMF cut its 2013 global growth orecast to

3.5% and predicted a second year o contraction or the

17-country Eurozone. At the recent Boao Forum or Asia,

Managing Director o the IMF Christine Lagarde, indicated

that a substantial portion o the global economy appears

better than it did a year ago. However, the situation in

Europe remains problematic, while spending cuts in the US

and medium-term challenges in Japan are also impactingon global economic recovery.

Aordng to th Aib

eonom Rsarh Unt,

th pa o ontratonn th eurozon onomy

asd onsdraly n Q1

2013


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Chambers Ireland Submission onthe Taxation o Micro Enterprises:

Micro Enterprises (enterprises with less than 10 employees)are vital to Irelands uture economic sustainability, with

over 90% o enterprises within the SME sector qualiying as

micro enterprises. Nationally, micro enterprises account or

nearly 27% o employment. Chambers Ireland believe that

is it essential that maximum assistance or mice enterprises

is achieved with the minimum impact on revenue.

In February, the Chamber Network made a submission to

the Department o Finances consultation on Taxation o

Micro-Enterprises: Reductions in Cost Compliance. The

purpose o this consultation is to assess the introduction

o a simplied accounting and prot calculation regime ormicro businesses which will cut cost compliance and ease

the challenges associated with starting-up a business.

Key recommendations contained within the submission

include:

The introduction o a simplied tax returns system to

reduce administrative and bureaucratic burdens which

act as a barrier to business

A reduction in the Capital Gains Tax (CGT) rate or

entrepreneurs rom 33% to 20% to incentivise andreward risk taking

Allowing companies to o-set Corporation Tax against

other taxes in the initial three-year start-up phase to

enable companies overcome challenges associated

with cash ow

Broadening the eligibility or the 12.5% Corporation

Tax rate beyond incorporated companies to give

unincorporated companies the potential to develop

and create new jobs

Abolishing the need or businesses to contract anaudit rom external providers i turnover is below a set

threshold to reduce costs and incentivise sole traders to

incorporate

Job creation is central to Irelands economic recovery and

Chambers Ireland and Cork Chamber believe this will not

be achieved through additional regulations and conditions.

It will be achieved with an easing o administrative and

regulatory burdens which continue to discourage people

rom starting new businesses and taking risk necessary to

grow existing projects.

An Alternative 10 Point Plan or Micro, Small

and Medium-Sized Enterprises:

As part o Budget 2013, the Government acknowledged

the important role that SMEs play in the Irish economy

and announced a 10 Point Tax Reorm Plan to help small

businesses. Proposals contained within the Governmentsplan are designed to assist small businesses by helping

with cash ow, reducing costs associated with tax

compliance and creating new jobs. While Cork Chamber

and Chambers Ireland welcome the introduction o ocused

measures to support SMEs in Budget 2013, the Chamber

Network also believes that the 2013 measures impose too

many limitations and in some cases are little more than

extensions o existing schemes.

Following analysis o the Governments 10 Point Plan,

Chambers Ireland engaged with a number o subject matter

specialists and representatives rom the Cork Chamber todevelop an alternative plan which will produce the type o

transormation necessary to stimulate real and meaningul

job creation and growth.

On April 10th, Chambers Ireland launched its Alternative 10

Point Plan or Micro, Small and Medium-Sized Enterprises

which has the potential to create up to 30,000 new jobs.

Key recommendations made as part o this plan include:

1. Introduce a Reduced VAT Rate on Housing Repair,

Maintenance and Improvements (RMI)

2. Enable Start-ups to Oset Corporation Tax against

Other Taxes Due

3. Halve the level o Capital Gains Tax or Entrepreneurs

to 16.5%

Chambers Ireland is the countrys largest business network representing 55 aliated chambers and their

members locally, regionally and nationally. On national issues o importance Cork Chamber works incollaboration with Chambers Ireland through active participation and contribution to the Chambers

Ireland Public Afairs Network, Local Government and Ratepayers Forum, Transport Users Council and

Chie Executives Forum. In recent months collaborative issues include an Alternative 10 Point Plan or

Micro, Small and Medium-Sized Enterprises and Taxation o Micro Enterprises.


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4. Introduce a Targeted Rates Reduction or Businesses

in Town Centres

5. ntroduce a Double Rent Deduction or Companies

with Upward Only Rent Reviews

6. Apply an Ireland Rate o Return in Tendering

Decisions or Public Sector Contracts

7. Introduce an Additional Tax Incentive Policy to

Encourage Private Sector Investment

8. Promote Ireland as the Best Possible Location or

Nearshoring

9. Mandate all Government Research Funding Agenciesto set aside 2.5% o their Budget or SMEs

10. Introduce Further Operational Initiatives to Promote

Business Interests

Policies such as reducing the VAT rate on housing

repair, maintenance and improvements (RMI) will not

only incentivise start-ups and create employment in

the construction sector, but have a knock on eect or

other sectors such as sot urnishings, white goods and

electronics. At the same time, halving the level o Capital

Gains Tax or entrepreneurs to 16.5% would incentivise

risk takers and support new business creation.

The ull plan is available to download rom the policy

section o the Cork Chamber website.

Action Plan or Jobs 2013:

The Governments Action Plan or Job 2013 was published

in February. Chambers Ireland has called on Government

to ocus on the realistic and timely implementation

o major reorms contained within the plan. The Plan

includes seven Disruptive Reorm measures to beimplemented in partnership with a number o senior

industry gures:

Liam Casey, CEO, PCH International

John Herlihy, VP International SMB Sales & Head o

Google Ireland

Sean ODriscoll, Chairman & CEO, Glen Dimplex

Group

Louise Phelan, VP o Global Operation EMEA, Paypal

Heather Reynolds, Owner & Director, Eishtec Dave Shanahan, Head o Strategic Health Initiatives,

AbbVie

These measures were selected because o their potential

to have a signicant eect on job-creation and include:

1. Jobs Plus: replacing the existing PRSI exemption

and Revenue Tax Assist Schemes with a simplied

initiative, to reduce the costs associated with

recruiting a long-term unemployed person o the

Live Register.

2. ICT Skills: the EU Foresight Study anticipates

that the EU labour market will require 384,000

ICT proessionals by 2015. The Government has

committed to delivering an additional 2,000 ICT

graduates to industry in 2013.3. Energy Eciency: the Government is committed

to creating a 70 million Energy Efciency Fund to

increase Irelands energy efciency perormance

supporting 20 major projects in 2013.

4. Trading Online: Less than one quarter o Irish SMEs

trade online contributing to Irelands online trade

decit where 70% o online spending is going out o

State. Online trading vouchers will be introduced in

2013 to encourage small businesses to trade online

creating 3,200 jobs

5. Business Licences: Government will create a single

licensing application system or up to 25 licences in

the retail sector, saving retailers over 20 million per

annum

6. Big Data: making Ireland one o the leading

countries in Europe or Big Data, a sector growing by

up to 40% per annum

7. Health Innovation Hub: establishing Ireland

as a world renowed National Health Innovation

Hub to drive collaboration between the health

system, medtech and healthcare companies orthe development o new healthcare technologies,

products and services

The Chamber network welcomes reorms and incentives

which have a signicant impact on job creation and

get those in long term unemployment back to work.

Chambers Ireland is a long time supporter o solutions

which reduce the administrative burden placed on

businesses and policies such as an Integrated Licensing

Application System and increasing the number o

businesses trading online are steps in the right direction.Making it easier and more cost eective to do business

will enhance competitiveness and support job growth.


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Q1 e Trds Sury RsultsThe respondents to the Chambers Economic Trends Surveyexamining Q1 2013 came rom a range o sectors includ-

ing proessional services (11%), manuacturing (12%) and

other service activities (28%). Over hal o respondents

(58%) employ between 1 and 50 people, while 13% employ

between 50 and 100 people and over a quarter (28%) em-

ploy over 100 people.

Condence amongst members about the nancial uture

o their business continues to increase (Figure 4). The vast

majority o members (87%) have reported that they are

condent, up 9% on the same quarter last year (78% Q1

2012).

Figure 4 Confdence in the uture o business

Source: Cork Chamber Q1 2013 Quarterly Economic Trends Survey

Only 8% o members now expect prots to decline in 2013,

a 14% reduction rom gures recorded in Q1 2012. How-

ever, despite an increase in condence there has been a 5%

decline (Q4 2012) in the numbers expecting net prots to

rise, only 46% now expect net prots to rise in the next 12

months.

Positively, 60% o respondents reported an increase in

business activity over the last three months while an

overwhelming majority o members (99%) expect businessactivity to increase or remain the same over the next three

months.

The top three concerns listed by respondents related to en-

ergy costs (60%), local authority rates and charges (46%)

and managing cashow (45%). While managing cashow

is consistent with previous quarterly results (53%, Q4 2012),

concerns regarding energy costs and local authority rates

and charges have increased by 36% and 21% respectively

(Q4 2012). Economic uncertainty remains an immediate

concern or 44% o members, however, it has allen rom

the rst most immediate concern in Q4 2012 (57%) to the

ourth in Q1 2013.

Employee Numbers:

Over the last quarter, employee numbers have increased

or remained the same in 93% o companies. Only 7% orespondents reported a all in employee numbers over

the period, which is lower than the 17% o respondents

who reported that their employee numbers had allen in

Q1 2012. Encouragingly, over two-ths (46%) expect to

employ more people over the next 12 months.

Figure 5: Employee Numbers


Despite stabilising employee numbers only 13% o re-

spondents believe that the Government initiatives and/or

policies are having a positive impact on employment andjob creation. This survey took place ater the Government

announced the Action Plan or Jobs 2013. Results show

that only 13% believe that measures in the Plan are likely

to encourage employment, while 54% believe they are nei-

ther likely nor unlikely and 28% believe they are unlikely.

Access to Credit:

There is a steady increase in the numbers who say they

believe their bank is supporting their business adequately.

Over three-quarters (76%) o members believe banks are

providing adequate support. This is the highest level sincethe question was rst asked in Q2 2011 when only 40% o

members agreed that banks were providing appropriate

support or business.

Members were asked i they had requested nance rom

their bank in the last three months. Over hal (59%) o

members had not applied or nance. O those who

applied or nance, 39% were seeking a new loan, 33%

requested new overdrat acilities while 28% applied or re-

newal/restricting o an existing loan or invoice discounting.

Despite the growing perspective that banks are now sup-

porting businesses, there has been a slight decline in thenumber o respondents who were successul when they

applied or new or additional credit acilities in Q1 2013.

While more than two-ths (45%) had a successul out-

come, this still represents a 6% decline rom the preceding


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quarter (51%, Q4 2012). At the same time, 18% stated that

they were partially successul, 11% were unsuccessul and

26% were still awaiting a decision. There has also been a

reduction in the number o applicants satised with the

decision. In Q4 2012, 51% o members indicated that theywere satised with the outcome, while only 38% in this

survey (Q1 2013) reported satisaction representing a 13%

decline.

More than two-thirds (69%) o respondents do not intend

to seek nance in the next six months which is consistent

with results rom Q4 2012 (68%) and Q3 2012 (65%).

Nearly two-thirds (65%) o respondents indicated an

awareness o the services provided by the Credit Review

Ofce (CRO). The Chamber reiterates its call to all busi-

nesses seeking loans to complete the ormal application

process and i they are in any way dissatised with theresults to appeal directly to the CRO. The Chamber also

stresses the importance o clear channel o communication

between banks and their customers regarding the loan ap-

plication process and internal/external appeals process.

Government Policy:

According to the survey, 53% o members are experienc-

ing difculties or delays in receiving payments rom State

Bodies. This is consistent with previous quarterly results. In

March, the Government adopted EU Directive 2011/7/EU

also known as the Late Payment Directive which requirespublic authorities to pay or goods and services within 30

days or in exceptional circumstances within 60 days.

Figure 6 Confdence in the Irish Economy


This survey asked members to indicate how condent

about the Irish economy compared to three months ago.

Results show that 39% are more condent, while 49%

indicated that their condence remained the same and

12% are less condent. Only 12% o respondents believe

that the proposed Croke Park Agreement II which is under

review will deliver sufcient cost reductions and productiv-

ity reorm (Figure 8).

Figure 7 Croke Park Agreement II


Members are becoming increasingly dissatised with

Government action relating to political reorm. In Q1 2012,52% o respondents indicated that action is having a nega-

tive impact, which is a rise rom 42% in Q4 2012. At the

same time, over a quarter o members (28%) have reported

dissatisaction with Government action on cost competi-

tiveness, a 12% increase rom Q4 2012.

Figure 8 Government Action


Positively, 61% o members are satised with Government

action in relation to oreign direct investment, an 11%

increase rom Q4 2012, while 64% o members are satis-ed with action on restoring scal sustainability, an 18%

increase rom the last survey.

In terms o the Government agenda, over hal o respon-

dents (52%) believe that Governments top priority should

be prioritising the management o public nances, while

47% indicated stimulating domestic demand and a urther

third (33%) avoured ensuring businesses have access to

credit.

The Chamber continues to monitor all Government initia-

tives to address issues o importance raised by our mem-

bers and will provide updates accordingly.


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I a region wishes to be an engine or sustained economic growth,

it must oer as conducive and attractive a business environment

to entice and secure commercial interest and inward investment.

According to the IDA Horizon 2020 Strategy the lesson o the Irishexperience with FDI is that success is never permanent and to

stand still is to be let behind.

Cork Chamber continues to work in partnership with local govern-

ment, statutory agencies/bodies and key regional stakeholders

to prove what is possible, even in adverse circumstances, when

vision, innovation, collaboration and a steadast commitment to

recovery and growth predominate. By identiying innovative ini-

tiatives in inrastructure, concentrated cluster developments and

urban development planning, Cork has successully implemented

strategic plans which ensure that it is well positioned to capitalise

on opportunities as a return to growth occurs.

Existing Strengths o the Region

Corks natural advantage in terms o scale and critical mass, its

unique energy advantages and its well developed geographic

clusters o export-oriented companies in the agriood, phar-

maceutical and ICT sectors have provided the region with a

well developed product o strength to build on throughout the

downturn. In the last 18 months alone, the region has built on its

already strong economic clusters by securing inward investment

rom international pharmaceutical rms such as Sangart, Bio-

marin and Eli Lilly and global ICT leaders such as Apple, FireEye,

Huawei and Big Fish Games. Meanwhile, indigenous companies

such as Voxpro and Carbery Group continue to provide high qual-

ity employment and deliver excellent products and services.

The Cork Gateway benets rom its renowned higher education

and research institutes which concentrate on research devel-

opment in areas o most relevance to its existing industries,

including ICT/electronics, liesciences, ood and the environment.

The regions capacity and status as a lead player in research and

innovation was urther corroborated by Governments recent

announcement that UCC/Tyndall Institute have been awardedour o the seven new world class research centres as part o the

300m Science Foundation Ireland/industry research investment.

Building a sustainable transport system

In February 2013, the Department o Transport announced a ve

year 8.3m unding package or sustainable transport invest-

ment projects or Cork City and suburbs. Cork has a relatively low

level o public transport usage by commuters; 8% in comparison

to Dublins 21% and this investment as part o a regional cities

sustainable transport programme aims to improve the walking,

cycling and public transport experiences or city commuters. Key

projects in the ve year initiative include a 1.1m investment to

improve the accessibility o Kent Station and its links to the city

centre, cycle corridors to link Douglas, Ballyvolane and UCC to

the city centre, a 1m redevelopment o Parnell Place and a 1m

investment in a new City Centre Movement Strategy (CCMS).

As the popularity o large suburban shopping centres continues

to increase and impact on city centre oot all, strategic initiatives

that improve vitality, commercial activity and growth in the city

centre are to be commended. The proposed CCMS contains radi-

cal and innovative measures which aim to better align cork with

leading European city transport and pedestrian systems. Plans

include pedestrian riendly spaces, an enhanced environmentor cyclists, restricted vehicular access to Patrick Street or certain

time periods and the re-introduction o a two-way trafc system

on MacCurtain Street. When undertaking an initiative o this

scale, public consultation and commercial and public buy-in is

integral to successul planning and ease o implementation. The

Chamber believes that clear and cohesive communication and

planning throughout the eight dierent phases o the Strategy

are key to ensuring its success and also recommends detailed

benchmarking and regular impact reviews to enable the NTA and

Cork City Council to demonstrate that the measures have worked.

A modern oce district that attracts FDI

Another priority project to grow the city s vibrancy and investor

appeal is the development o a quality modern business district

in Cork City Harbour. Spread over 162 hectares on the eastern pe-

riphery o Cork City Centre, Cork City Harbour is the second larg-

In a recent issue o Public Afairs IrelandDr Siobhan Bradley (Acting) Policy & Research Manager

outlined the Chambers views on some o the strategic initiatives that the region has progressed and some

o the outstanding challenges that remain. Below is an edited version o this article.


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est city centre development space in Europe. The demand rom

business is increasingly or ofce products located in dynamic,

urban environments and the City Harbour development provides

a unique opportunity in this regard.

Extensive analysis has been undertaken and a priority area hasbeen identied or an ofce led, mixed use development at the

western end o the North docks, ronting the River Lee and the

City Centre. This area presents a signicant opportunity to release

large areas o state controlled lands that are owned or inuenced

by Irish Rail/CIE and grow their value or Cork and Ireland. The

project has a real and tangible capacity to grow the citys investor

appeal by providing the business community with the condence

that it will have the ofce property products they might need

whatever their business lie stage or requirement.

Building research & innovation

The planned Cork Science & Innovation Park (CSIP) on the westernringe o the City will strengthen Corks position as a global player

in the science, technology and knowledge driven enterprises that

are increasingly important to global economic success. By play-

ing to the regions economic strengths, and ocusing on three key

business sectors - ICT, Health and Wellbeing and Energy and the

Environment - the CSIP will extend on the existing levels o con-

nectivity between industry, third and ourth level education and

research institutions. Advanced research in these three business

sectors, which are driving economic activity in the U.S., Asia and

Europe, is predicted to have a major impact on the regional and

national economy creating up to 1,000 direct and 289 indirect

jobs within ve years.

Planting More o the Right Seeds

Despite the signicant progress on particular strategic initiatives,

there remain a number o challenges which require progression

to ensure a conducive business environment that expands and

intensies investor interest.

International communications

As an island, Ireland must take every reasonable opportunity

to improve its international communications connectivity not

only to support the ICT sector, but also to capitalise on emerg-

ing opportunities in the internationally traded services sector

and elsewhere. There are strong economic arguments, both at aregional and national level, or bringing Tier 1 international data

connectivity to the southern part o the country which would

improve connectivity, and reduce data costs or businesses along

the Atlantic corridor. It would also underpin the development o

the Cork Docklands and CSIP. The act that big data and ICT are

among the disruptive reorm areas identied in the Action Plan

or Jobs 2013 reinorce the need or high speed, timely and cost-

eective broadband access across Ireland.

A 2012 economic appraisal o a new Tier 1 connection under-

taken by Cork BIC on behal o Cork City Council, Aurora and E-net

ound that the connection could contribute an additional 160

million in GDP or Regional Ireland over 3-5 years, create up to4,300 new jobs and contribute up to an additional 328 million to

the Exchequer over 5 years rom increased taxes and reductions in

unemployment benet.

The Chamber and its partners have engaged in extensive eort

to secure investment through private, non-statutory channelsand it has become increasingly clear that Government support is

imperative to progress action, a perspective that is echoed in the

IDAs Horizon 2020 Strategy.

A dedicated convention centre

The absence o a city-based convention centre is a major inra-

structural decit which means the Cork Gateway currently strug-

gles to tap into the large number o potential income generating

audiences across a broad spectrum o areas (e.g. business/aca-

demic conerences, tourism, entertainment events). A large scale

convention centre has potential as a Munster product and would

positively impact on the regions tourism and grow revenue

generating opportunities or hotels, retail and hospitality sectors.

The success o the 5,000 capacity Live at the Marquee concert

series illuminates the potential market or such an entertainment

hub and a permanent development will enhance Corks role as a

premier business and leisure destination.

Cork City Council is undertaking an economic appraisal to deter-

mine the economic case or public support and the Chamber is

hopeul o a avourable decision to progress the development o

a landmark initiative that has clear nancial, economic and social

dividend or Cork and its surrounding regions.

A conducive business environment

An enabling business environment is essential to support the

regions economic development and encourage urther inward

investment and the Chamber, its membership and regional stake-

holders remain ambitious in their targets o ensuring appropriate

inrastructure is in place to attract and grow commercial activity

within the County. Corks progressive approach to economic de-

velopment and the relentless pursuits o strategies to overcome

existing challenges will ensure that the region is ready to capital-

ise on emerging economic opportunities. Progress in relation to

the citys sustainable transport system, Cork City Centre Harbour

and the CSIP are all testament to this. Targeted investment today

will ensure its attractiveness well into the uture.

The Chamber remains committed to representing our mem-

bers and advocating or the progression o additional strategic

initiatives that strengthen the regions economic attraction and

enabling it to prosper regionally, nationally and internationally.


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mA sabshs cr ex crk rag 60w jbs

In March, McAee announced

that the company will establish

a Centre o Excellence or

Enterprise Security Solutions in Cork creating 60 new sotware

engineering jobs. McAee is creating a dedicated engineering

team to provide ast efcient responses to sales opportunities

or the company. As part o this a number o small specialised

engineering teams in Cork will be responsible or designing and

building new eatures or its key enterprise customers.

Commenting on the announcement, McAee Co-President Todd

Gebhart said, The establishment o the Centre o Excellence

builds upon a proven track record o success and deepens our

commitment to partnering with Ireland and the local workorce

in Cork. Im extremely proud o the Cork operation and the

talented team that works there.

Recruitment is currently underway by the company with

roles or Java & C++ sotware engineers. Welcoming the

announcement Cork Chamber highlighted that this decision

once again intensies the strong business links between

Cork and Silicon Valley. The announcement conrms Corks

signicance in the ICT sector and is also testament to the

regions high quality and globally workorce as well as enabling

and positive business environment.

mak it crk:

While Cork has been very

successul in attracting some o

the worlds leading technology

companies, the demand or skilled proessionals with multi-

lingual and IT skills continues to increase. With over 10,000

people already employed in over 40 overseas ICT/Technology

companies in the city and county, Cork has a strong IT cluster

and Make IT in Cork aims to attract additional skills to Cork to

support the continued growth o the participating companies.Skills shortages have a direct impact on the regional economy,

as well as the Irish economy and Make IT in Cork is an innovation

solution to attract skilled ICT and multi-lingual proessionals

to the region to ensure an adequate supply o workers to meet

existing demand.

Make IT in Cork provides job opportunities and listings at www.

makeITinCork.com, as well as supporting inormation about

relocating to Cork. A social media campaign on Facebook and

Twitter to promote the region also orms part o the initiative.

Run by Cork-based sotware and social media company,

AssemblyPoint Ltd, it is supported by Cork Chamber, IDA Ireland

(South), Cork City Council, Cork County Council and the South

Cork Enterprise Board and has direct input rom ten o Corks

leading ICT companies Apple, Amazon, BigFishGames, EMC,

Voxpro, VMWare, Trend Micro, McAee, Quest and Pilz.

Frey sabsh s emeAtha Sppr cr crk

FireEye, a leading provider o sotware

protection against web and email next-

generation security threats, is to open an EMEA technical

support centre in Cork. The company will recruit 150 level one,

two and three support engineers or its centre in Cork. The new

EMEA technical support centre will be a strategic centre or

FireEye and will have a central role in supporting international

growth. Tony Kolish, senior vice president o customer support

at FireEye said, FireEye is very happy to be locating its EMEA

customer support organization in Cork. Putting FireEyes EMEA

technical support centre in Ireland was an obvious choice

due to the countrys successul track record in technology, an

existing cluster o high-tech companies, and the availability o

competent, multilingual talent.

300 vs S Rsarh:

In February, the Government

announced details o signicant

investment by the State and industry

partners in scientic research which

is closely aligned to industry andenterprise needs, job opportunities and societal goals. The 200

million investment by the Science Foundation o Ireland and

the 100 co-investment by industry partners will target research

into major social challenges including ood health, marine

energies and ICT and lead to the creation o 7 new world-class

research centres.

The seven research centres will create a new collaborative

approach bringing together multidisciplinary teams

compromising 800 high level research scientists rom across

Irelands leading higher education and research institutes and

interacting with 156 industry partners. Commenting on the

announcement Minister or Research and Innovation SenSherlock TD said The sheer scale o industry involvement with

a commitment so ar o over 100 million also indicates a major

endorsement o Irelands research capability. Industry globally

clearly recognises that this is a really good country in which to

conduct their business.

UCC/Tyndall Institute has been selected to lead our o the seven

world class research centres rom a total o 35 applications

conrming Corks high standing as a leading location or

research excellence in science and innovation. Commenting

on the announcement Cork Chamber Chie Executive Conor

Healy said This accolade and the investment that it brings

to the regions scientic research industry is testament to the

accomplishments and world-class expertise that UCC and the

Tyndall Institute has nurtured and developed over time.


11/12

wrs r yur usss

11

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Pr crk ss ras trad traf 2012:

The Port o Corks End o Year Statement shows trade trafc

results or 2012 at 9.05 million tonnes, a 2% increase compared

to 2011 gures and the rst time trafc gures in the Port have

surpassed 9 million tonnes since 2008.

Although 2012 was a challenging year with the import o goods

through Irish ports reported to have allen by up to 2012. The

container business at the port o Cork has shown an increase o

6% with over 165,000 TEU handled during 2012. Animal eed

stus increased by 58% compared to 2011, while ertilisers,

cereals and other trades have shown a marginal decrease in

2012.

Oil trafc remained steady despite the lower levels o domestic

economic activity; however exports o rened product rom

Philips 66 Whitegate Oil Renery were strong and continue to

be a signicant part o the Port o Cork business.

In April 2012, the Port o Cork was awarded two Cruise Insight

Awards or Best Shore Side Welcome and Best Tour Guides

at the global shipping conerence in Miami. 57 cruise vessels

visited the Port o Cork during 2012 bringing almost 100,000

passengers and crew o the region and the Port is scheduled to

accommodate 64 vessels in 2013. Port ofcials are pro-actively

engaged with tourism interests, Cork City and County Councils

and destination attractions to enhance the product on oer to

visiting cruise lines with a view to growing the business urtherthrough its dedicated cruise terminal.

87 w jbs ad crk:

In January, 87 new jobs were announced or Cork as three

dierent companies chose to expand their operations in the

region.

Whitehouse Analytical Labs, a testing acility or pharmaceutical

and medical devices, has selected Cork as a base or its

new analytical testing acility as part o their international

expansion creating 35 highly skilled jobs. Commenting on the

announcement Brian Mulhall, Chie Executive o Whitehouse

Labs said, Ireland was chosen or this investment due its strong

ocus on lie sciences and its ability to allow us to better serve

our clients and expose us to a broader and more diverse market

in Europe.

IMSTech, a German based provider o manuacturing solutions

or the Lie Sciences sector, will establish a Service support andResearch and Development Centre in Kinsale, Co. Cork creating

35 new highly-qualied jobs. The company will recruit 35 jobs

or highly skilled engineers and technicians. Ralph Coakley,

MD o IMSTech Ireland said, concentration will be ocused on

developing new clients in Europe and the US. Ireland provides

all the required criteria to support this unction. IMSTech oers

integrated and innovative manuacturing solutions or medical

device, bio-pharmaceutical and pharmaceutical companies in

both Germany and Ireland.

Loop 1 Systems Inc., a company specialising in training and

proessional services or SolarWinds customers in North America

and the EMEA region is to establish an EMEA sales, customer

support and technical centre in creating 17 new jobs. Don

Kinnett, President o Loop1 said, The replicating o our North

American operations here in Cork will allow Loop1-EMEA

to oer our suite o products and services to clients that are

located in Europe and beyond. We regard the establishment o

this operation as playing a vital role in creating global outreach

to many o our Fortune 500 clients.

Cork Chamber

welcomed these

announcements

highlighting thatthe decision by

these companies

urther substantiates

the key strengths

and resources that

the Cork region

has to oer and

clearly position

Cork as a location o

choice or industry

requiring high

skills services and a

supportive business

environment.

87 nw jos wrannound or

cork as thr

dfrnt ompans

hos to xpand

thr opratons n

th rgon


12/12

DIsclAImerCork Chamber Economic Bulletin is published by Cork

Chamber, and is a regular publication exclusive to members

of the Chamber. The data contained in Cork Chamber

Economic Bulletin is not necessarily that of Cork Chamber,

neither do they accept any responsibility or liability for any

legal implications arising there from.

CORK CHAMBER ECONOMIC

BULLETIN is printed using Brillia

HD Pro-T processless thermal

plates, requiring no developer,

water or gum.

For further information on Cork Chambers Policy &

Research Activities, please visitwww.corkchamber.ie


The European Investment Fund and Allied

Irish Banks (AIB) announced in November

the rst guarantee agreement, to supportlending to ast growing small and medium-

sized enterprises under the Risk Sharing

Instrument (RSI), a joint initiative o the

European Investment Bank Group and the

European Commission.

AIB has taken the lead in being the rst

bank in Ireland to oer Risk Sharing

Instrument backed loans to innovative

businesses primarily operating in the

knowledge and smart economy sectors.

The RSI acility aims to encourage banks to

provide loans o up to 7.5 million to SMEs

and small mid-caps undertaking research,development or innovation, and seeking

nance or investments and/or working

capital. The minimum loan is 300,000.00.

AIBs Chie Executive, David Duy said: I

am delighted to be partnering with the

EIF and EIB on this initiative which ts

very well with our overall SME strategy.

AIB is keen to partner with knowledge

based businesses seeking capital to build

sustainable competitive advantage and

accelerate growth in international markets.

By improving access to loan nance to

accelerate export led businesses in Ireland,we believe it will serve to stimulate credit

demand in this economic environment.

Companies interested in applying or a

loan which can be deployed or working

capital and/or capex should contact their

nearest AIB Business Banking or their local

branch.

Aib grup rs 80 ll w

ld t at ussss, wt

a eurpa istt Fud

AIB Supporting Business

Speak to your AIB Relationship Manager or one o our

SME Specialists to fnd out how AIB can help support your business.

The Big Drivefor Small Business

Drop into any branch www.aib.ie/business1890 47 88 33

Cork Chamber Economic Bulletin Q1 2013

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