Severe recession, store closures, plummeting oil prices, and lockdown fatigue

Business Today: the best news, analysis and comment from The Irish Times business desk

Minister for Finance Paschal Donohoe says the coronavirus crisis has resulted in a “severe recession”

Minister for Finance Paschal Donohoe says the coronavirus crisis has resulted in a “severe recession”

 

Minister for Finance Paschal Donohoe says the coronavirus crisis has resulted in a “severe recession” that is likely to see the economy shrink by 10.5 per cent this year with unemployment soaring to a record 22 per cent, equivalent to one in five workers.

Analysing the latest Government forecast, Cliff Taylor writes that what we know now is that the initial economic hit will be hard and will leave lasting damage, “but we still do not know when the restrictions will be lifted to allow recovery to start”.

In his column this week, Eoin Burke-Kennedy warns “the public’s adherence to the country’s strict lockdown rules, credited with flattening the infection curve, maybe fraying at the edges”.

More than 200 Bord na Móna workers fear the permanent loss of their jobs after the Covid-19 crisis forced the State company to release them on full pay. In the retail sector, fashion outlet Cath Kidston is to permanently shut its 60 UK and Irish stores with the loss of more than 900 jobs.

There is more positive news from the hotel group Dalata. Reporting on its sale and leaseback of the Clayton Hotel Charlemont in Dublin, Mark Paul spoke to its boss, Pat McCann, who outlined plans for a major advertising push to attract domestic holidaymakers later in the year, assuming that hotels are permitted to at least partially reopen with stringent safety and social distancing rules in place.

The “generous terms” of the Government’s Covid-19 unemployment scheme and a lack of rigorous checking has created a strong financial incentive for people to leave work, according to criticism from Davy Stockbrokers, which has been disputed by the department.

Meanwhile, oil prices continued to spiral downwards, as the price of US crude oil for June delivery more than halved on Tuesday and Brent, the international benchmark, dropped below $20 per barrel for the first time in 18 years.

Away from Covid-related news, Eoin Burke-Kennedy also reports on how one of the world’s largest fund managers with more than £1.1 trillion (€1.24 trillion) in assets, says it opposed the re-election 4,000 company directors last year, in a number of cases for failing to take sufficient action on climate change.

Finally, in what seems like a snapshot of a very different world to today, figures for the final quarter for last year show the average rent in the State rose to €1,226 per month, while five new areas have breached the threshold to be classified as rent pressure zones. Peter Hamilton reports.