Business Week: Roll back the years... Drumm, high rents, growing economy

Meanwhile, the fallout from the economic crisis continues in the courts

 

After eight long years in the doldrums, the construction industry appears to be roaring back. Two reports showed activity in the sector accelerated sharply last month, while demand for industry professionals grew by 46 per cent and wages are on the rise.

Ulster Bank’s Construction Purchasing Manager’s Index for February showed record growth rates in housing and commercial activity.

Hays Ireland, a recruitment company, said a quarter of the new construction jobs were in the homebuilding sector. Middle managers in areas such as quantity surveying and architecture are the most in demand. The demand for architects last month had doubled since the same month last year.

The need to build more houses is abundantly clear, with rents, in particular, rising relentlessly. The latest figures from the Private Residential Tenancies Board showed rents in Dublin are now higher than they were at the peak of the boom, having increased by 9.8 per cent las t year.

It’s fair to say that many ordinary punters aren’t getting too carried away with the recovery, with spending on the rise, but only slowly. New figures from the Central Bank show consumers are shunning debt and credit cards in favour of putting their money on deposit, despite poor interest rates.

Inflow into deposits was the largest since 2008, while the number of credit cards fell by 16 per cent. And, lured by lower fixed rates, homeowners are increasingly switching from variable to fixed rate mortgages.

Meanwhile, the fallout from the economic crisis continues in the courts. Former Anglo Irish Bank chief executive David Drumm’s Aer Lingus Airbus A330-200 touched down at Dublin Airport at 5.14am on Monday after he abandoned his four-month battle against extradition.

A quarter of an hour later, he was arrested and taken to Ballymun Garda station where he was charged with 33 offences linked to financial transactions prior to the collapse of Anglo. They include fraud, forgery, misleading management reporting, unlawful lending, falsifying documents and false accounting,

Mr Drumm, who has denied any wrongdoing, was granted bail by judge Michael Walsh. He will have been relieved, as he will likely be waiting until the middle of next year for a trial, and the DPP had argued that he should not get bail.

Separately, two other former Anglo officials had their convictions for conspiracy to defraud Revenue and falsify records quashed at the Court of Appeal. Bernard Daly, former company secretary, and Tiarnan O’Mahoney, former chief operations officer, were jailed last July.

Mr Justice George Birmingham, sitting with Mr Justice Garrett Sheehan and Mr Justice John Edwards, said the court had followed a “flawed procedure” in convicting them, including the admission of inadmissible evidence and the expiration of the statute of limitations. There were positive developments on the jobs front as Facebook confirmed plans to create an additional 200 jobs in Dublin by the end of the year, bringing its total workforce to 1,500 in Ireland.

The good news for the lucky new recruits is that Irish employees are the happiest in Europe, according to a survey by indeed.com.

The survey of 35 countries ranked Colombia top for job happiness, followed by Mexico, Russia and Ireland. China was in last place.

It was a rough week for Swiss-Irish food group Aryzta, which owns the Cuisine de France brand. Firstly it saw its share price fall sharply after it admitted growth would be erratic over the next 18 months.

As if that wasn’t bad enough, chief executive Owen Killian then sold €16 million worth of shares in the company, equivalent to two thirds of his total stake.

Mr Killian expressed regret afterwards and said the sale was “not indicative” of his confidence in the company. All of this followed the release of half-year results, which showed the company again failed to hit its earnings targets.

There was more reason for cheer elsewhere as the ESB reported a 43 per cent jump in pre-tax profits last year, and paid a final dividend to the State of €214 million.

The energy group, which employs over 7,000 people in Ireland, said pre-tax profits rose from €214 million to €307 million last year. Meanwhile, revenues at Irish petrol forecourt retailer Applegreen rose by 15 per cent to €1 billion in 2015 as strong consumer sentiment in Ireland helped drive the group forward.

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