There was a sense of shock this week in Leixlip, Co Kildare and its surrounding hinterlands as the news filtered through that US tech giant Hewlett-Packard is to cut nearly all of the 500 jobs at its Kildare plant in the coming year.
Workers at the facility had feared cutbacks since October, when HP announced plans to restructure its global operations, but the scale of the cuts suffered in the Republic came as a shock. Just a handful of staff will stay on in Leixlip to maintain a local presence for the company.
Minister for Jobs Mary Mitchell-O’Connor said every effort was being made to secure a buyer for the print plant in Leixlip, while the IDA was working to ensure the site was sold as a going concern and “to make sure that those people who have lost their jobs will be re-employed”.
On the other side of the ledger, there were also several positive job announcements throughout the week.
Abrakebabra Investments, the fast-food franchise group led by businessmen Graeme Beere and David Zebedee, said it will create 300 jobs over the next three years. The group, whose brands include Abrakebabra, Bagel Factory and O’Brien’s Sandwich Cafe, made the announcement as it opened its 130th outlet in Co Kildare.
Separately, about 200 jobs will be created by two companies in Kilkenny and Waterford. Kilkenny animation company Cartoon Saloon announced a strategic tie-up with Canada’s Mercury Filmworks. The new venture, to be known as Lighthouse Studios, will create more than 140 jobs in the next three years.
In Waterford city, computer solutions firm Red Hat announced 60 new jobs over four years as part of a €12.7 million investment in a new project.
In retail, convenience store franchise Centra said it will open 20 new stores this year and revamp 100 more as part of a €20 million investment plan. Centra said the expansion will create about 460 new jobs.
If all that wasn’t enough, work also commenced on a new town centre development in Cherrywood, south Dublin, that will eventually provide 4,000 new homes for some 15,000 people. US property investment firm Hines, which owns 60 per cent of the site, said the initial work will lead to the creation of 180 construction jobs.
Ryanair predicts falling fares amid slightly falling profits
There was good news for jet-setters as Ryanair said air fares are expected to continue falling this year. The company said its profits for the three months ended December 31st fell 8 per cent, to €94.7 million from €103 million on the back of cheaper fares and weak sterling.
“You are going to see fares down all the way through 2017,” chief marketing officer Kenny Jacobs said.
The company said it is sticking with its prediction that full-year profits will touch down between €1.3 billion and €1.35 billion, assuming that a terror attack or other incident does not dissuade people from flying over the next few weeks.
In a separate development, Ryanair raised €750 million from the third bond issue in its history. The debt must be repaid in 2023 and will have an interest rate of 1.125 per cent.
It was a busy week for the low-cost airline. Chief executive Michael O’Leary told reporters in Brussels it is likely to take up an option to buy a further 100 Boeing 737 Max aircraft to add to the 100 it has already committed to purchasing.
The airline has already dubbed the craft a “gamechanger”, as it will cut fuel bills by 20 per cent while carrying 197 passengers, compared with the current 737’s capacity of 189.
Investment from post-Brexit relocations and Chinese FDI
The State's never-ending struggle to secure inward investment continued as data from international jobs site Indeed.com indicated a significant surge in the number of financial sector workers in Britain and Europe looking to relocate to the Republic.
Since the UK voted to leave the European Union in June, UK-based job searches for “auditor” roles in Ireland have increased by 55 per cent. Searches for “financial analyst” and “accountant” have jumped by 50 per cent and 46 per cent, respectively.
One institution the Republic might have to miss out on, however, is Lloyd’s of London, which is reportedly leaning towards Luxembourg for its post-Brexit EU home, despite detailed discussions between company representatives and Irish authorities.
And it’s not just Brexit-related investment being enjoyed by the State: According to a study by international law firm Baker McKenzie, FDI from China surged to $2.9 billion (€2.7 billion) in 2016 from just $10 million in 2015.
The increase means the Republic was the fifth-largest market in Europe for Chinese investment last year, and the sixth-biggest when North America is included.
The big rise in investment was largely down to the HNA Group’s purchase of Irish aircraft leasing company Avolon for $2.5 billion. The deal saw Avolon become part of HNA’s extensive interests in the aviation sector, spanning stakes in 20 airlines and nine airports in China.
With all that FDI, and more on the way, it seems there has never been a better time to lease office space. Property consultancy HWBC has said office rents will grow strongly in Dublin this year despite a major acceleration in completions of new projects.
It is predicting an 8 per cent rise in prime office rents to €65 per square foot. The consultancy said there was little chance of an oversupply, despite the large number of new developments coming on stream in 2017.
Despite all that, the Republic remains under threat from plans by US president Donald Trump to cut corporation tax. However, his press secretary, Sean Spicer, assured The Irish Times this week that the State need not worry.
“Ireland, frankly, did a really good job of getting the Celtic Tiger by bringing industry and business over there through smart policy,” Spicer said. “We have got to be smarter when it comes to tax and regulatory policy.”
Bulk-buying mortgages to keep a roof over struggling families
In housing, the Government moved to shake up the "mortgage-to-rent" scheme, which has been hampered with poor take-up.
Under a new plan announced by Minister for Housing Simon Coveney, private-finance houses will be able to bulk-buy the mortgages of struggling families and lease the properties back to the State.
Families then become State tenants, with a guaranteed 20-year lease and an option for a further 20 years. It is understood there will be another option for families to buy back their homes at the market rate any time they choose.
Separately, residential development land value in Dublin rose by 14 per cent last year and is forecast to grow by a further 15 per cent in 2017, according to the Society of Chartered Surveyors Ireland.
The group’s latest survey indicated that prime office and retail rents in the capital will likely increase by 7 per cent this year. Moreover, the value of office development land in Dublin is forecast to rise by 12 per cent in 2017 after recording 17 per cent growth in 2016.
