Cork Chamber Economic Bulletin Q2 2013

7/27/2019 Cork Chamber Economic Bulletin Q2 2013

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poudy ponod by AIB

Economic Outlook

National Policy

Inuence

Results o Q2

Economic Survey

National Aviation

Policy

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wrs r yur usssply trg ts prt trtl

economic BulletinJULY 2013. iSSUe 15

ttsonor Healy, Chie Executive

[email protected]

obhan Bradley, (Acting) Policy & Research

Manager

[email protected]

islinn Stanton, Policy & Research Executive

[email protected]

d us

www.rr.

Cork Chamber Pre-

Budget Submission

2014

Recent Positive

Developments

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Newly released CSO data shows that GDPcontracted by 0.6% in the rst quarter o

2013, signalling a return to recession asdata revisions now point to a 0.2% all inGDP in the nal quarter o 2012. Furtherto this, GDP also contracted in the thirdquarter o 2012 by 0.1% resulting ina 1.8% contraction over the past ninemonths. Positively, the Q1 2013 QuarterlyNational Accounts show that GNP in Q1increased by 2.9% compared to the ourthquarter o 2012.

The latest Exchequer returns, released by

the Department o Finance show that anExchequer decit o €6,593 million wasrecorded at end-June, which is €2,850million lower compared than the sameperiod in 2012. For the month o June,the Exchequer decit was €1,298 millioncompared with a decit o €9,443 millionin June 2012.

The Department o Finance reports thattax revenues at the end o June wereup €585 million (3.4%) year-on-yearand €166 million (1.0%) ahead o target.

For the month o June, the Exchequerreceived €2,837 million in tax revenues,representing a €62 million (2.2%) surplusagainst target and an increase o €219million (8.3%) compared to the samemonth in 2012.

Two o the “big our” sources o taxrevenue – Income and Corporation

Tax – are ahead o prole, while VAT andexcise duties recorded a shortall in June.Income tax recorded a surplus o €40million (3.5%) in June against a monthlytarget o €1,130 million. Cumulatively,income tax receipts are on target withreceipts o €7,292 million compared to anexpected €7,307 million. Corporation taxperormed strongly in June, with receiptso €1,031 million representing a surplusagainst prole o €101 million (10.8%).

VAT recorded a shortall o €40 million(17.6%) in June, a ‘non-due’ month. As aresult VAT receipts are now €156 million(2.9%) behind target ater the rst sixmonths o the year. While excise dutiesrecorded a shortall o €39 million (9.2%)in June, and are €66 million (2.9%) behindprole, they are up €10 million (0.4%)year-on-year.

Altogether the small tax heads – customs,capital gains tax (CGT), capital acquisitionstax (CAT) and stamp duties are almost

exactly on target or the rst six monthso the year. Local property tax is alsoperorming well with €126 millionreceived in the rst six months o the year.

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Date of Forecast 2013 2014

Department of Finance April 2013 1.3 2.4

Central Bank of Ireland April 2013 1.2 2.5IMF June 2013 1.1 2.2

European Commission May 2013 1.1 2.2

ESRI May2013 1.8 2.7

Source: Department o Finance, July Bulletin 2013

Growth orecasts 2013 and 2014 are summarised in Table 1 below:



coRk chambeR economic Bulletin

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Exports:

According to the BOI Economic Research Unit, weakness in

the domestic economy has been oset by export growth

in the recent past but this did not materialise in the rst

quarter o 2013. Exports ell by 3.2% against a 1.0% all in

imports, resulting in the external sector impacting nega-

tively on GDP.

Oliver Mangan Chie Economist AIB has indicated that the

expiry o pharmaceutical patents along with the economic

perormance o the EU economy (alling back into reces-

sion last year) have impacted negatively on Irish exports.

The EU is the recipient o two thirds o Irish exports, while

pharmaceutical goods exports were down by almost 10%

when compared with the same period last year.

Growth in services exports has slowed to 1.3% in the rst

quarter o 2013, down rom 9.4% rom a year earlier. Ac-

cording to Mr. Mangan, “Exports are an enormous part

o our economy. Their weakness has had a very negativeimpact on GDP growth, returning the economy to reces-

sion since mid-2012.”

Employment:

The latest seasonally adjusted unemployment rate rom

the Quarterly National Household Survey (QNHS Q1 2013)

is 13.7%, a decrease rom 14.1% in the previous quarter

(Q4 2012). There was an annual increase in employment o

1.1% or 20,500 in the year to the rst quarter o 2013. This

brought total employment in Ireland to 1,845,600. Thiscompares with an annual increase o 0.1% in the previous

quarter and a decrease o 0.9% in the year to Q1 2012.

Figures or June 2013 show that there were 61,113 people

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

7% (Figure 1).

Figure 1: Live Register Cork City & County June 2013

Source: CSO July 2013

The Government published the Action Plan or Jobs 2013

in February which includes 333 measures to be imple-mented in 2013 by all Government Departments as well as

46 state agencies. The plan also contains seven ‘Disruptive

Reorm’ measures to be implemented in partnership with

senior industry partners. The overall target or the plan is

to increase the number o people in employment by 10,000

in 2016 and reach 2 million by 2020. The rst quarterly

review o this plan took place in April. The report was posi-

tive, indicating that 144 o the 150 measures (96%) due in

Q1 2013 had been completed.

Ination:

Consumer prices, as measured by the CPI (Consumer

Price Index) increased by 0.1% in the month o June. This

compares to a decrease o 0.2% in the same month last

year. Prices on average, as measured by the CPI, were 0.7%

higher in June 2013 when compared with February 2012.

Figure 2: Ination

Source: CSO June 2013

Euro area ination increased by 1.4% in May, a 0.2%

increase rom the April (1.2%) gure in 2013. The EU

Harmonised Index o Consumer Prices (HCIP) increased by

0.1% in June 2013, compared with a 0.2% decrease in June

o last year. Prices on average, as measured by the HCIP

were 0.7% higher in June compared with June 2012.

The volume o retail sales increased 0.1% in May 2013

when compared with April 2013. The overall KBC/ESRI

Consumer Sentiment Index increased rom 58.9 in April to

61.2 in May.



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Eurozone:

Figure 3: European Employment Rates

Source: Eurostat, June 2013

The Euro area economy contracted or a sixth consecutive

quarter in Q1 with real GDP alling by 0.2% ater declining

by 0.6% in the nal quarter o 2012. According to the

BOI Economic Research Unit, even though industrial

output rose by 1% in March ater alling by 0.3% between

December and February, the survey data, particularly the

Purchasing Managers measures o activity, indicates a

urther decline in GDP in the zone in Q2.

According to Eurostat, unemployment in the Eurozone in

May is at a record high o 12.1%, up 0.1% rom the previous

month. The number o people now out o work has risen

above 19 million, while the unemployment rate in the EU27

(total EU member states) is 10.9%.

The ECB cut the main renancing rate at the May meeting

to 0.5%. The BOI Economic Research Unit suggests that a

urther rate cut is possible as the ECB continues to insist

that it stands ‘ready to act’ again i warranted by economic

conditions.

At the same time, the Euro has remained quite resilient on

the oreign markets over the past month.

Global Outlook:

According to the Irish Stability Programme Update

published by the Department o Finance in April, Ireland

has maintained its credit ratings amidst downgrades or

a number o other European countries in recent months,

in recognition o the outperormance o scal targets, the

continuation o economic growth and strong adherence to

the EU-IMF Programme. Both Standard & Poor’s and Fitch

have recently upgraded Ireland’s outlook rom negative to

stable. Ireland’s recent successul return to the international

bond market and its large cash balances means that it is

well placed to exit rom the EU-IMF Programme at the endo 2013.

In July, Ireland successully concluded the 11th review

mission o our EU-IMF Programme. In line with each

o the previous quarterly reviews, Ireland has met its

commitments and our continued strong programme

implementation has been recognized by the Troika.

Commenting on the conclusion o the 11th review

mission, Minister or Finance Michael Noonan TD and

Minister or Public Expenditure & Reorm Brendan Howlin

TD stated: “Ireland has successully completed the 11thReview Mission and we continue to meet our targets. The

completion o the Q2 2013 programme conditions brings

to over 230 the number o commitments that have been

ullled on time and we have now drawn down some 91%

o the available unding.”

Figure 4: IMF Global Growth GDP

Source: IMF, July 2013

As part o its update to the World Economic Forum (WEO),

the IMF has indicated that global growth is happening

at a slower rate than expected with risks to that growth

increasing especially in emerging markets. Global growth

or 2013 is now projected at 3.1% and 3.8% or 2014 ,

representing a downward revision o a quarter-point each

year compared with orecasts in the April 2013 WEO.



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Chambers Ireland submissionto the review o ‘Supporting

Economic Recovery and Jobs –Locally :’

The ‘Action Programme or Eective Local Government –Putting People First’ includes an ambitious ramework orreorm. Supporting Economic recovery and Jobs – Locally recognises the importance and necessary work that mustbe done at local level to complement national policy as theGovernment works towards its stated aim o making Irelandthe best small country in the world in which to do business.

Chambers Ireland recently made a submission to a review

by the Department o Environment, Community and LocalGovernment on ‘Local Government Sectoral Strategy topromote employment and support local enterprise.’ TheChamber Network identied our main areas in its submissionwhere local authorities can do more to assist business andacilitate job creation.

1. Rents & Rates:Reorm o local government presents a uniqueopportunity or reorm o the rates system whichcan ease the burden on struggling businesses. Theintroduction o a local property tax presents a newunding stream which can reduce local authority

dependence on commercial rates thus supportingtown centres and creating a positive environment orbusinesses to survive and develop. The abolition o town councils and their integration into City or CountyCouncil boundaries, urther presents an opportunityor reorm. Where harmonisation o rates is requiredbetween two areas and there is an inconsistencybetween the commercial rates in a Town Council andCounty Council area, equalisation must be achieved byreducing the higher rate instead o increasing the lowerrate.

Rents and rates provide a great challenge orbusinesses across Ireland. As a result, the ChamberNetwork recommends a targeted rates reduction or

businesses in Town Centres. The introduction o arates reduction or companies, located within towns and

city centres, which provide much needed employmentand contribute to the quality o lie in these areas cangreatly assist local businesses. Chambers Ireland andCork Chamber believe that a reduction in rates can

lower costs or businesses, promote job creation andstimulate economic growth.

2. Procurement & Tendering:Chambers Ireland welcomes the establishment o the National Procurement Ofce and is committed toworking with the Chie Procurement Ofcer and othersto ensure the best outcomes or business and best valueor the State. However it is vital that local authoritiesuse the tendering process as an opportunity to supportlocal business and realise its importance in terms o local job retention and growth.

The Chamber Network recommends that theDepartment o Public Expenditure and Reorm update

their guidelines to ensure local frms are not

excluded rom the tendering process. Governmentdepartments and agencies need to be mindul o thepositive outcomes o awarding tenders to locally basedsuppliers. Rather than applying a ‘value or money’criteria based solely on lowest price, considerationmust be given to the value produced to the nationaleconomy in terms o jobs retained and created, revenueincreased and welare costs reduced arising romawarding contracts.

3. Collaborating with Businesses and

Chambers o Commerce: The County and City Managers Association (CCMA)report ‘Supporting Enterprise, Local Developmentand Economic Growth’ includes a number o welcomereerences to Chambers o Commerce throughoutIreland. Recognition has been given to the excellentoutcomes that can be achieved when local authoritieswork with Chambers o Commerce to support and helplocal business communities.

Accordingly, the Chamber Network calls on Governmentto encourage urther collaboration between local

authorities and Chambers. Cork Chamber is involvedin a number o joint initiatives with Cork City Council andCork County Council to support creation and expansion

Chambers Ireland is the country’s 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 Aairs Network, Local Government and Ratepayer’s Forum, Transport Users Council and

Chie Executive’s Forum. In recent months collaborative points o ocus have included review o the

government’s ‘Local Government Sectoral Strategy to promote employment and support local enterprise’

and recommendations or the National Entrepreneurship Policy Statement.



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o sustainable micro, small and medium sizedenterprises in the Cork region. This activity createsan environment in which enterprises and economicactivity can expand and grow. Government and localauthorities need to build on the structures already inplace and include representatives rom the businesscommunity and Chambers where possible.

4. Business Supports:Local authorities provide support to business in localareas including nances, networking opportunities,promotion o local areas, acilities, inrastructure,estival and events. The annual Chambers IrelandExcellence in Local Government Awards, sponsoredby the Department o Environment, Community andLocal Government (DECLG) allow local authoritiesto be acknowledged or the various schemes theyimplement to support local businesses. These Awardshighlight best practice, stimulate ideas and encourage

local authorities to go urther in their attempts toassist local businesses.

Accordingly, the Chamber Network urges Government

and the DECLG to continue to support awards which

recognise the ongoing work o local authorities insupporting their local business community.

The ongoing reorm o local government presentsmany opportunities to improve existing structures andmechanisms. Chambers Ireland and Cork Chamberbelieve that more can be done to urther improve therelationship between local authorities and the business

community. Chambers o Commerce are best positionedto understand the needs o the business community andcan work more closely with local authorities to supportcommunities throughout Ireland. Working together wecan make Ireland the best country in the world to dobusiness, work and live.

Chambers Ireland Submission on a

National Entrepreneurship Policy

Statement or Ireland:

Entrepreneurial activity is the driving orce o a thrivingeconomy. 99.8% o enterprises in Ireland are categorisedas SMEs and the development o a policy supportive o entrepreneurship acts as a catalyst to innovative excellenceand sustainable job creation. Chambers Ireland believesthat supporting local business plays an integral role inpromoting pioneering ideas and improving Ireland’sregulatory environment or business operation.

In June 2013, the Chamber Network made a submissionto the Department o Jobs, Enterprise and Innovationon “A National Entrepreneurship Policy Statement or

Ireland”, supporting economic growth through strategictax policy instruments and scal incentives ocusedon entrepreneurial promotion. The purpose o theconsultation is to develop a harmonized national policy

statement to support a successul shit towards an exportbased economy built on enterprise and innovation.

Key recommendations contained within the submission

include:

1. Supporting innovative ideas and entrepreneurshipto improve consumer condence and support

avourable domestic demand in the Irisheconomy.

2. Promoting a joined up approach to providinginormation on business processes and undingavailable to serve in the best interests o entrepreneurs.

3. Maximising on the centralized businesssupport services provided by local Chambers o Commerce by adopting a collaborative approachto dissemination o inormation and commercial

expertise.

4. Improving the business environment ormicro, small and medium-sized enterprises bysupporting local entrepreneurs e.g. access tonance.

5. Applying insolvency guidelines to guaranteethat individuals who have previously ailed inbusinesses are not prohibited rom taking urtherentrepreneurial risks.

6. Recognising the networking and mentoringsupport accomplishments o businessorganisations and providing unding to ensurethe continuance o these initiatives.

7. Promoting and encouraging the EuropeanNetwork o Mentors or Women Entrepreneursto empower emale entrepreneurs to pursuecommercial activities in the State.

8. Establishing a Youth Entrepreneurship Fundto provide educational and nancial supportservices to innovative young people as a key

means to reduce the 29.4% youth unemploymentrate.

9. Coordinating a ocused approach to the educationsystem through the teaching and developmento entrepreneurship at the secondary and third-levels.

Chambers Ireland and Cork Chamber believe thatentrepreneurship is important or job creation andeconomic recovery in Ireland. A National EntrepreneurshipPolicy Statement or Ireland is an excellent opportunity tocreate a supportive and positive environment. As a result,the Chamber Network urges Government to support risk-takers through targeted measures as they take their rststeps in business




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Q2 e Trds Sury Rsults The respondents to the Q2 2013 Chamber’s Economic Trends Survey are rom a range o sectors including manu-

acturing (16%), nancial services (10%), proessional,

scientic and technical services (10%), and ‘other service

activities’ (23%). Over two-thirds o respondents (67%) em-

ploy between 1 and 50 people, while 11% employ between

50 and 100 people and over a th (22%) employ over 100

people.

Condence amongst members about the nancial uture

o their business has increased signicantly since the

Chamber’s economic trends survey series began in Q1

2009 (Figure 5). The vast majority o members (91%) haveindicated that they are condent about the nancial uture

o their business, up 4% since the previous quarter (87%,

Q1 2013) and up 15% since the same quarter last year

(76%, Q2 2012).

Figure 5: Business Confdence

Source: Cork Chamber Q2 2013 Quarterly Economic Trends Survey

The number o businesses reporting an increase in turn-

over in the last quarter has risen rom 49% in Q4 2012 to

58% in Q2 2013, while 59% expect net prots to rise in the

next 12 months - a 13% increase rom Q1 2013.

The top three concerns listed by respondents related to ‘lo-

cal authority rates and charges’ (54%), ‘ination’ (53%) and

‘erosion o competitiveness’ (49%). While ‘local authorityrates and charges’ are consistent with the preceding quar-

terly results (46%, Q1 2013), concerns regarding ‘erosion o

competiveness’ and ‘ination’ have increased 20% and 10%

respectively (Q1 2013). ‘Managing cashow’ and ‘economic

uncertainty’ remain an immediate concern or 45% o

members.

Employee numbers:

The majority o members (89%) stated that employee num-

bers increased or remained constant over the quarter, with

11% indicating that employee numbers have allen since

Q1. The number reporting a decline in employee numbers

has increased slightly rom 7% in Q1.

Over two-ths (41%) indicate that they expect employeenumbers to rise in the next 12 months (a 5% decline rom

Q1), while hal o members (50%) expect their employee

numbers to remain unchanged.

Figure 6: Employee Numbers


Access to Credit:

Three-quarters o respondents believe that their bank isproviding adequate support or their business. This result

is consistent with preceding quarterly results (76%, Q1

2013).

Six out o ten members (63%) indicated that they have not

applied or nance in the last three months. O those who

applied or nance, 64% were seeking renewal or restruc-

turing o an existing overdrat or loan, while 17% applied

or a new loan.

Despite the growing perspective that banks are now sup-

porting businesses, there has again been a decline in the

number o respondents who were successul when theyapplied or rescheduled or new credit acilitates in Q2 2013.

Over a third o members (36%) were successul in their

application, representing a 9% decline rom the preceding

quarter (45%, Q1 2013). At the same time 31% were par-

tially successul, 14% were unsuccessul and a urther 19%

were still awaiting a decision.

Seven in ten members (70%) indicate that they do not

intend to seek nance in the next six months which is con-

sistent with results rom Q1 2013 (69%) and Q4 2012 (68%).

In addition to the numbers applying or new or restruc-tured credit acilities; it seems that working capital is an

ongoing issue or businesses. Four in ten companies (40%)

who responded to the survey report that working capital

is an issue or their business, evidenced by the act that a



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quarter (25%) o those seeking unds rom banks do so or

this purpose.

According to the survey, a th o members (20%) are

experiencing difculties paying their creditors on time. At

the same time, 48% indicate that they are waiting a longerthan average time to be paid by debtors. O those com-

panies who have reported delays in paying their creditors,

over hal (51%) report that managing cashow impacts on

their ability to pay on time.

Government Policy:

There has been a decline in the number o respondents

who are condent about the Irish economy compared to

three months ago (Figure 7). Results show that 29% are

more condent, representing a 10% decrease rom the

preceding quarterly results, while 56% are neutral (up 7%rom Q1 2013) and 15% are less condent (a 3% increase

rom Q1 2013). Only 12% o members are condent about

the Government’s ability to introduce budgetary policy to

encourage economic growth in 2014.

Figure 7: Irish Economy Confdence


In May, Government provided details on the roll-out o the

new Local Enterprise Ofces (LEOs) which will replace the

existing 35 City and County Enterprise Boards (CCEBs) andoperate under the jurisdiction o the local authorities. As

part o Government’s programme o public service reorm

and agency rationalisation, the 31 new LEOs aim to create

an improved support system or micro and small enterpris-

es. This survey asked members i they were aware o the

LEOs announced by Government to replace existing CCEBS.

Results show that over hal o members (52%) are aware

o these new ofces. However, only 21% believe that LEOs

are ‘very likely’ or ‘quite likely’ to provide adequate support

to micro and small businesses, while 23% believe they are‘quite unlikely’ or ‘very unlikely.’

Figure 8: Government Action


Members are becoming increasingly dissatised with

Government action relating to employment and jobcreation, cost competitiveness, and restoring scal sustain-

ability. Nearly a third (32%) o respondents in Q2 2013,

have indicated that action is having a negative impact on

employment and job creation, a rise rom 27% in Q1 2013.

While 27% o respondents reported that action is having a

negative impact on cost competitiveness, a 11% increase

rom the preceding quarter. At the same time, over a

th o members (21%) have reported dissatisaction with

government action on restoring scal sustainability, a 10%

increase rom Q1 2013.

In terms o the Government agenda, over hal o respon-dents (57%) believe that Government’s top priority should

be stimulating domestic demand (up 10% rom Q1 2013),

while 40% indicate management o public nances (down

12% rom Q1 2013) and a urther 29% avoured ensuring

businesses have access to credit (down 4% rom Q1 2013).

The Chamber continues to monitor all Government initia-

tives to address issues o importance raised by our mem-

bers and will provide updates accordingly.

Finally according to this survey, over a third o members

(36%) are unaware o the Single Euro Payments Area(SEPA) which will be introduced in February 2014. This

new system will replace existing national payment systems

and change the way euro dominated electronic payments

are processed across Europe. SEPA will mean that users o

payment services can make and receive payments across

all participating countries using a common system, thereby

creating a more efcient, borderless payments area. All

national direct debits and credit transers will be SEPA

compliant including sta payroll, creditor payments and

receiving electronic euro payments rom customers within

SEPA. Further details on this system can be ound at www.

readyorsepa.ie



cr cr suss t

naTionaL aviaTion PoLicY:


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In February, the Department o Transport released an issues paper‘An Integrated Irish Aviation Policy’ detailing eight broad areas theyplan to address in the rst ever national aviation policy. The Chamberhas prepared a submission in response to the Department’s issuespaper outlining a number o key recommendations it believes areessential to meet the air-connectivity needs and requirements o Cork’s business community.

Key recommendations contained within this submission include:

• The need to designate Cork Airport as the Gateway Airportor the South o Ireland and one o three 24 hour airports in

the State

Airport Ownership:

• Incorporate a provision to revisit Cork Airport’s ownership atan appropriate time in the uture

• Establish a local consultative committee with key regionalstakeholders to regularly engage with Cork Airport andthe DAA to directly input into and guide the strategicdevelopment o the Airport

• Provide guaranteed certainty that the Board o the DAA willcontinuously include at least two representatives who have aspecic mandate to represent Cork Airport

Future Airport Capacity Needs:

• Incorporate a provision to continuously evaluate and monitorairport capacity needs to ensure an efcient response toevolving air-travel demands

• The Department and the IAA must ocus on securing as broada range as possible o ull services and budget airlines yinginto and out o Ireland

• A ormal study o Cork Airport’s runway capacity needs to be

undertaken to identiy planning solutions that enable directUS connectivity

Regional Airports:

• The Policy needs to concentrate on the key Gateway Airports(Cork, Dublin and Shannon) which demonstrate strength interms o capacity, trafc volumes and revenue returns

• Establish a level playing elds as regards State unding orairports

Irish Airlines:

• Commit to maintaining at least two competing airlines and

ensure a balance is maintained between low cost carriers andull service providers

Inbound Tourism & Business Trafc:

• Introduce an integrated tourism strategy which strengthensand better aligns working partnerships and promotionalcampaigns o key tourism, aviation and enterprise

stakeholders to increase inbound business and leisure travel

Connectivity:• Continuous prioritisation o a competitive air transport

environment to increase the number o destination servedacross the UK and Europe rom Cork Airport

• Eorts to secure a carrier or a Cork-Dublin route must continueto support existing multinationals and indigenous businessesand to attract urther direct investment. Reinstatement o this route is important or acilitating onward connectivity tokey US and European destinations currently not served romCork Airport and to maximise the amount o transer activityat Dublin Airport which will retain revenues associated withhub connectivity within the state

• Make it an objective o the policy to maximise the number

o passengers connecting to other airports within the stateby ensuring internal-connectivity at times suitable or transerpassengers

• Incorporate a commitment to protect and grow connectivityto LHR, Schiphol and Paris given their importance or onwardconnectivity to high demand business destinations currentlynot served by Cork Airport

Air-Travel Tax:

• Abolish the Air Travel tax which has materially aected airline

capacity

Cargo Services

• Assess the possibility o developing a ground-orientedregional distribution centre or Cork Airport which sees privatedistribution and logistics companies working in tandem withthe Airport to provide integrated/proximate services or aircargo.

• Develop resources, sponsored by the airport, to simpliy theprocess o air shipment which in turn may attract additionalcargo business to the airport

• The expansion o US preclearance to include cargo wouldurther enhance the competitiveness o Irish exporters

General Accessibility

• Improvements to regional road inrastructure are vital tomaximise the highest revenue returns, build critical mass ornew services and incentivise urther capacity growth. Keyprojects in this regard include the M20, N28, N22 and N27

As an island economy, air access is vital or tourism, exports and connectivity. At present, the aviation sector contributes

approximately €4.1 billion directly to the Irish economy in addition to a number o indirect benefts, such as tourism revenue and

tax revenue. Commercial lie in the South o Ireland is inextricably linked to Cork Airport and the region’s world class acility and

air connectivity to more than 50 direct destinations is essential or economic growth. The development and uture o Cork Airport

continues to be a core priority or Cork Chamber given the vital roles o regional, accessible air-services in acilitating business

and commercial activities and wider regional economic development.



9

cr crPr-budgt Suss 2014

The Chamber is currently fnalising its Pre-Budget submission 2014 which will set out the priorities o Cork’s business community or Government in advance o the Budget. Decisions in Budget 2014 will have signifcant implications or every business in

Ireland. Cork Chamber is engaging with its membership base to ensure that recommendations incorporated in our Pre-Budget submission are representative o and provide eectively targeted responses to the challenges and constraints conronting

businesses in Ireland – rom the sole trader to the MNC. Key areas to be incorporated include cost competitiveness, taxation,working capital and entrepreneurial supports. A ull copy o our Pre-Budget Submission will be available shortly.

A central priority o Budget 2014 must be the resolute

avoidance o any increases to the costs o doing business.

Instead what is now required are budgetary measures that

acilitate and support the operation o existing businesses

and incentivise and enable the expansion and growth o these

businesses in addition to measures that improve condence

levels and stimulate domestic demand. Government must lead

in ensuring that a acilitative business environment is in place.

Our PBS will incorporate a range o proposals regarding taxation;

micro, small and medium enterprise supports; supports or

entrepreneurs; employment; supports or essential regional

inrastructure and public sector reorm. Proposals across each

o these areas are essential catalysts to stimulate key sectors o

the economy, secure employment and reinvigorate the regional

economy as a drive o national growth or instance:

• Ireland’s nearest neighbour, the UK (including Northern

Ireland) has reduced its corporation tax rate by 8% since

2010 and will have a corporation tax rate o 20% rom April

2015. Now more than ever it is vital that the Government

continues to robustly deend our 12.5% corporate tax

rate which is essential to retain and attract oreign direct

investment in Ireland.

• Given the on-going atness o the construction crisis, there

is an increasing need to implement targeted solutions that

end the on-going paralysis o the sector and incentivise

increased activity levels. Accordingly, Cork Chamber calls

on Government to implement a VAT reduction similar

to the 9% rate introduced or the tourism sector in 2011.

Rather than resulting in losses, the application o a targeted

reduction will likely stimulate higher levels o constructionactivity and generate associate increases in VAT returns and

employment given the reduced incentive to operate in the

black economy.

• Cork Chamber has recognised the need or and supported

Government’s decision to introduce a local property tax

(LPT). Given that signicant job creation is dependent

on recovery in the domestic economy, we believe that

the LPT creates an opportunity or appropriately targeted

reductions in local authority charges to support local

businesses by reducing their direct costs and improving

competitiveness. As a result, all revenue generated through

a LPT should be ring-enced and retained and spent withinthe local authorities in which it is generated.

• A successul entrepreneur can make a signicant economic

contribution to the economy in terms o taxes on earnings,

employment taxes, rates and economic activity. Recent

research rom the Central Bank conrms that it is younger

rather than smaller businesses that are responsible or the

greatest levels o job creation. Government must ensure

that appropriate measures which support and incentivise

entrepreneurial activity are implemented in Ireland to

oster job creation and stimulate Ireland’s economic

growth.

• Availability o working capital and support or extended

cash ow must be a priority or Government in Budget

2014. Problems with working capital place a considerable

burden on companies. In our Q2 2013 economic trends

survey, our out o ten businesses said that access to

working capital is a problem or them. Cork Chamber

is concerned that Government policy is not adequately

ocused on the most pressing needs o SMEs and urges

urther intervention to ensure that eective provisions are

in place to support rms in accessing working capital.

• Ireland’s unemployment rate remains high at 13.7% and

the country now aces an unemployment crisis which is a

critical and constraining barrier to the nation’s economic

recovery. It is imperative that Government maintain cost

competitiveness to ensure that no urther employee-related

costs are imposed on existing and potential employers.

Any changes to the existing sick pay regime or employer’s

PRSI contributions will put pressure on employers and

directly impact on SME employment generation, while,

any urther changes to health insurance (oten a benet

given to employees) i.e. pricing o beds in public hospitals

will push up employers’ health insurance costs.

In addition to nancial measures, cost competitiveness, supports

or entrepreneurs and small and medium sized enterprises,

our PBS will incorporate a range o proposals around regional

inrastructure. In the current scal climate, key enabling

inrastructure that will ensure Cork is optimally positioned to

attract and secure commercial interest and inward investment

opportunity must be supported. Cork Chamber recommends

that Government support a number o innovative PPP models

that allow or the completion o strategic road projects e.g.

Dunkettle Interchange, N28 and the M20. At the same time,

Government must progress action on the Cork City Harbour

project which will provide appropriately built ofce space

that allows Cork to capitalise on inward investment rom high-

growth companies

Full details o the Chamber’s Pre-Budget Submission will be

available shortly on www.corkchamber.ie



10


r pst dvps

iagra Gba crk eFr ad nwrkg ev

On October 17th and 18th 2013, the

inaugural Global Cork Economic Forum

& Network Event will take place in Cork

City Hall as part o the agship Cork

Gathering Rebel Week. Organised by

Cork City Council and Cork County

Council, the Forum encourages the Irish business Diaspora to

return to Cork to take part in meaningul discussions and gain

a greater understanding o economic renewal and job creation

opportunities specic to the County and City.

According to the Chairman o the Global Cork Economic Forum

John Mullins, “The clear objective o this Forum is to ensure that

we invite the best business talent in various sectors, including

agriood, pharmachem, ICT and energy, as well as tourism,entrepreneurship and research to Cork to ocus on ideas that

will benet the region so that we can create jobs or those who

live here or those who would like to return. We are inviting

those Cork citizens who are working in larger markets, larger

businesses with larger vision to come back and help us to devise

the way orward. The Global Cork Economic Forum will give

us the chance to gather ideas or a path to renewed economic

prosperity or our region and meaningul employment or those

who have let or who have no jobs.”

A database o potential members or the Cork Global Network

is currently being created rom within the Cork Community. To

nominate a colleague/riend or to register your own interestin being part o this business network, please log onto www.

corkbusinessdiaspora.com

irad’s opss tradRakd Wrd tp 10

The International Chamber o Commerce

(ICC) issued its latest Open Markets Index

in June which ranks countries by their

openness to trade. According to the index, Ireland ranks 8th out

o 75 countries assessed worldwide and 5th in Europe behindLuxembourg, Belgium, Malta and the Netherlands.

Commenting on Ireland’s ranking, Ian Talbot CEO Chambers

Ireland and Secretary General o ICC Ireland said, “As a small

island, an open economy is vital to allow or access to larger

markets and ree movement o capital or investment. Ireland’s

ranking is positive news given the importance o Foreign Direct

Investment and international trade or our economic wellbeing

and particularly to support employment and to create the

growth so desperately needed in this economy. Those countries

ranked above us are our direct competitors or the title o ‘Best

small country in the world in which to do business.’ I we are

to achieve this target by 2016, then we need to keep ocusedon maintaining our openness to trade and ensure that no new

barriers, such as taxes, are put in place.”

The Index ranks 75 countries using an aggregate score between

one and six based on our actors: observed trade openness,

trade policy, openness to oreign direct investment and

trade-enabling inrastructure. It is commissioned by the ICC to

monitor the extent to which governments are ollowing through

on their commitment to create genuinely open economies.

Vs crk cy ‘www.vsrky.’

Cork County Council has launched an

improved ‘Visit Cork County’ website.

The redeveloped website www.

visitcorkcounty.com was unded by the

Economic Development Fund and provides tourist inormation

to oreign and domestic visitors to Cork County.

Cork businesses, local voluntary groups and estival organisers

can advertise their services and/or events to visitors. The

website includes a new registration unction through which

businesses and event organisers can create their own prole,

upload pictures and post their events to the website’s calendar.

A mobile version o the website has also been developed or

‘on-the-go’ visitors.

Businesses and estival organisers can now register with

the website to join 70+ members who have already signed

up. I anyone is interested in registering or requires urther

inormation, please visit www.visitcorkcounty.com or

alternatively you can email [email protected] or phone

Magali Bolger on 026-20520.

irsh War ra awardd Abra

In May, Minister or Environment,

Community and Local Government

Phil Hogan TD announced that Irish

Water has awarded its customer call

centre contract to Abtran based in Bishopstown, Cork creating

400 jobs. Established in 1997, Abtran is the largest provider o

customer management services solutions in Ireland.

Commenting on the announcement Minister Hogan said, “I

welcome the announcement o these 400 jobs. This is good

news or Cork. These jobs are greatly needed and together with

the 1,600 jobs to be created through the national metering

programme, are examples o the economic benets rom

a reormed water services sector. Increased inrastructural

investment, greater oreign direct investment rom water-

intensive industries and innovation in water technologies will

create urther jobs as reorm o the water sector is implemented.

Irish Water will work closely with local authorities to deliver thewater services o the uture.

Operations at the call centre will commence in July 2013

creating an initial 100 positions to support Irish Water’s metering



wrs r yur usss

11

r pst dvpsprogramme. By mid 2014, the call centre will employ 400

people and provide customer care to approximately 1.6 million

domestic and commercial public water users.

Welcoming the decision Cork Chamber Chie ExecutiveConor Healy said “the creation o an additional 400 jobs will

undoubtedly have a substantial and welcome impact on local

employment and result in wider positive gains or the local

economy. The award o this contract is testament to the broader

and continuing success o the business processing outsourcing

sector in the Cork region.”

emc adds 200 jbs crk as par ‘ajr xpas pa’

In June, EMC announced the creation

o 200 highly skilled jobs at its newofce in Citygate, Mahon, Cork as part

o a €100 million investment. EMC is

a global leader in enabling businesses

and service providers to transorm their operations and deliver

IT as a service. Recruitment is already underway or these new

ull-time positions spanning engineering, customer supports,

sales, nance, R&D and IT.

Commenting on the announcement David Goulden, EMC’s

President and Chie Operating Ofcer said, “EMC’s investment

in Ireland is key to our global growth strategy which is ocused

on three o the most important drivers in IT or enterprise

customers – cloud, Big Data and trusted IT. Cork is a criticalinnovation hub in EMC’s Centre o Excellence network, and our

investment in Ireland demonstrates our long-term commitment

to the country.”

Welcoming this announcement Cork Chamber highlighted

that the decision urther substantiates Cork as a location o

choice or industry requiring high skills levels and a positive and

supportive business environment.

Pr crk sgs SsrPr Agr wh Pr Shzh:

The Port o Cork and Port o Shenzhen have signed a SisterPort Agreement which will see both ports developing trade

and business links as well as deepening the understanding and

relationship between each other.

Port o Shenzhen is a major port, located in the southern region

o the Pearl River Delta in China’s Guangdong province and is

the economic hinterland or Hong Kong trade with the Mainland

and one o the most important ports in terms o China’s

international trade. It is home to 39 shipping companies with131 international container routes, and receives 560 ship calls

per month.

This agreement will see the leadership and management o

both ports maintain regular contact and will look to send sta

or an exchange o visits to their respective ports to discuss

issues o mutual benet and urther enrich the cooperation

and collaboration between both ports. There will also be an

agreement to recommend benecial partners to each other.

Speaking at the signing o the sister port agreement, Chairman

o the Port o Cork, John Mullins said: “We have signed this sister

port agreement with the Port o Shenzhen to the benet o both ports. We anticipate much cooperation and exchanging o

port expertise into the uture and we know the Port o Cork can

expect to learn a lot rom Shenzhen in terms o international

trade, port development and expanding our services. This really

is an excellent opportunity or the Port o Cork and one we

intend to maximise.”

Pfzr vs $130 a saarg ss crk adDb:

Pzer has announced that it will

invest $130 million in two o its Irish

manuacturing sites. The pharmaceutical

company will invest $30 million in its

Ringaskiddy site in Cork and a urther $100 million in its Grange

Castle site in Dublin.

The $30 million investment in Ringaskiddy is to develop

specialist new capability to manuacture some o Pzer’s newest

medicines in cancer and other uture pipeline medicines. This

requires exible development acilities capable o managing

a wide range o processes and technology. The introduction

o ow processing and innovative technologies requires not

just an investment in new equipment but also an increase and

deepening o R&D skills, particularly in the area o real-time

analytical technologies, ow processing, new technology and

scale-up. This investment ensures the Ringaskiddy site will be

in a position to be considered or on-going development work

on new products, not just or commercial launch, but also or

clinical products.

Welcoming the announcement Barry O’Leary, CEO IDA Ireland

said ‘The Ringaskiddy site was Pzer’s rst manuacturing acility

in Ireland almost 45 years ago - it is antastic to see the work at

that site evolve into high-tech manuacturing.’

Brendan Keating CEO

Port o Cork, Mr Dong

Port o Shenzhen,

Deputy Lord Mayor,

Cllr Emmet O’Halloran

and John Mullins, Port

o Cork Chairman



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 Chamber’s Policy &

Research Activities, please visit www.corkchamber.ie


Wiser Ltd, the Cork based re-cycling and

reuse business, established in 1993, has

ully concluded the purchase o the two

businesses based in the South East o

Ireland, including Mr Binman which was

placed in receivership during 2012. The

acquisitions o the waste collection service

covering the South East, Waterord &

Tipperary and a waste recycle plant based

in Carrick-on-Suir, makes Wiser one o the

largest independent business o its type in

Munster area.

Dermot O’Brien, Managing Director, said

that “this level o expansion was being

considered beore the receivership o Mr

Binman. However, when the opportunity

arose, we were concerned that given the

negativity in the market place that it may

be difcult to acquire the necessary bank

support. I was pleasantly surprised by

the appetite within AIB to support our

business and in particular with the speed

with which matters were progressed.”

The integration o the businesses is nowcomplete and the enlarged Group now

supports 160 jobs and services Cork City

and County, Waterord, Tipperary and

the South East Region. AIB or its part

is delighted to support another Cork

success story and wish all the Wiser team

continued success.

Wsr Ltd grwt

supprtd y

aib Grup

Lending criteria, terms and conditions apply. Allied Irish Banks, p.l.c. isregulated by the Central Bank of Ireland.

Drop into any branch • 1890 47 88 33 • www.aib.ie/business

Speak to your AIB Relationship Manager or one

of our SME Specialists to find out how AIB can

help support your business.

AIB supportingbusiness.

Mick Beecher

Manager AIB

Bank, Dermot

O’Brien

Managing

Director Wiser

Limited, Anne

O’Brien Director

Wiser Limited,

Tommy Gibbons

Senior Manager

AIB Bank.

Cork Chamber Economic Bulletin Q2 2013

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