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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
obhan Bradley, (Acting) Policy & Research
Manager
islinn Stanton, Policy & Research Executive
d us
www.rr.
Cork Chamber Pre-
Budget Submission
2014
Recent Positive
Developments
9
10
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.
ntl & Rgle outl
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:
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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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coRk chambeR economic Bulletin
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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coRk chambeR economic Bulletin
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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
Source: Cork Chamber Q2 2013 Quarterly Economic Trends Survey
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
Source: Cork Chamber Q2 2013 Quarterly Economic Trends Survey
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
Source: Cork Chamber Q2 2013 Quarterly Economic Trends Survey
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
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cr cr suss t
naTionaL aviaTion PoLicY:
coRk chambeR economic Bulletin
8
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.
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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
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10
coRk chambeR economic Bulletin
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
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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
7/27/2019 Cork Chamber Economic Bulletin Q2 2013
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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
coRk chambeR economic Bulletin
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.