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Irish Examiner
2 days ago
- Business
- Irish Examiner
David McNamara: All-out trade war averted but ripples will be felt
The weekend breakthrough in trade talks between the EU and US provided a fillip to markets early in the trading week, but the details of the agreement are scant, and key areas are yet to be determined - notably pharmaceuticals. A baseline 15% tariff has been agreed on EU exports to the US, with no additional tariffs from the EU on US products. With pre-Trump tariffs of around 4% to 5% on the EU, reports suggest the 15% will be inclusive of this, meaning a net additional 10% versus the January 2025 baseline. Higher tariffs of 25% will remain on steel and aluminium for now, but autos tariffs will be reduced from 25% to 15%, which will be something of a reprieve for the large car industry in central Europe. European Commission president Ursula von der Leyen also said there would be no tariffs from either side on aircraft and aircraft parts, certain chemicals, certain generic drugs, semiconductor equipment, some agricultural products, natural resources and critical raw materials. In return, the EU has agreed to purchase more US energy and military equipment, and potentially lower its tariffs in some areas. There are conflicting reports on pharmaceuticals, with some suggesting 15% would apply immediately, while others suggest a carve out below that rate for some areas. The final landing zone for pharmaceuticals and other strategic sectors such as semiconductors is likely to become clearer when the US government concludes 'Section 232' trade investigations into these sectors in the coming weeks. For now, markets have welcomed the certainty provided by the deal, with stocks rising sharply on Monday. While details are scant, the key tail risk of an all-out trade war is now off the table. Nonetheless, the EU has conceded significant ground from its initial position of 'zero-for-zero' tariffs and a later offer of 10%. If sustained across most sectors, a 15% tariff would bring US duties to their highest level since the 1930s and would likely damage trade and GDP growth in the export-orientated EU and could also yield a 'stagflationary' shock for the US. For Ireland, the deal is less damaging than many feared post-'Liberation Day'. Alongside the conclusion of the 'big beautiful' US tax bill, which retains existing provisions which underpin the presence of US FDI intellectual property in Ireland, the certainty might be cautiously welcomed by some large exporters. However, in lower margin sectors, where products might be more readily substitutable, the new higher 15% rate could be a death-knell for some transatlantic markets. It could be several months for the final deal to be hammered out, and the impact on the economy will play out over an even longer period in the years ahead. David McNamara is senior economist with AIB
Irish Examiner
03-07-2025
- Business
- Irish Examiner
Services sector sees 'significant loss of momentum' in June
The services sector in Ireland saw a 'significant loss of momentum' during June as a result of softer output, new business and hiring activity, the latest AIB Ireland Services Purchasing Managers' Index (PMI) shows. The PMI reading for the sector in June stood at 51.5, down from 54.7 in May, which marks the slowest pace of growth since January 2024. The PMI reading is calculated from a survey of firms on the volume of business activity compared with one month previously. The index therefore varies between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease. AIB chief economist David McNamara said new business expanded at a 'modest pace in June', dampened by an 'outright decline in export orders'. The PMI found international demand also contracted for the first time since October 2023. 'Some firms linked lower export activity to weaker US and European markets, and the impact of global trade tensions,' Mr McNamara said. The PMI also showed expectations 'remained close to the post-pandemic low'. Only two services sub-sectors registered growth during the month — the technology, media, and telecoms sector, and the business services sector. Transport, tourism, and leisure saw a decline for the fourth month in a row, while financial services contracted for the first time since January 2021. Firms found cost pressures eased during June to a nine-month low, while service providers raised their charges at the slowest rate in more than four years.
Irish Examiner
01-07-2025
- Business
- Irish Examiner
Irish manufacturing sector sees 'sharp rise' in jobs
June saw the fastest overall improvement in the Irish manufacturing business conditions for just over three years as output and new orders grew and employment saw a 'sharp rise', the latest AIB Manufacturing Purchasing Managers' Index (PMI) shows. The PMI is a composite single-figure indicator of the manufacturing sector's performance during the month. It is derived from indicators for new orders, output, employment, suppliers' delivery times and stocks of purchases. In June, the AIB Irish Manufacturing PMI recorded a reading of 53.7, up from 52.6 in May. Any figure greater than 50.0 indicates overall improvement of the sector. The Irish manufacturing PMI remains above the flash June readings for the eurozone, US and UK at 49.4, 52.0 and 47.7, respectively. Chief economist with AIB David McNamara said the June PMI showed 'robust growth sustained' during the month, which was broad-based across output and new orders along with a 'sharp rise in employment'. "Output rose strongly in June due to a solid pipeline of new activity in the domestic economy. This was reflected in robust growth in new orders,' he said. 'Nonetheless, some respondents noted weaker UK demand, dragging down export orders, for a third consecutive month.' The PMI noted total new work for manufacturers increased for the sixth consecutive month in June and the rate of growth was only fractionally lower than in May. Survey respondents mostly cited improving domestic demand while elevated global business uncertainty and subdued demand in major export markets contributed to another decline in new work from abroad. In terms of employment, Mr McNamara said the pace of hiring hit a three-year high as firms reacted to rising workloads. 'Higher levels of employment were attributed to greater workloads, long-term business expansion plans and forthcoming new project starts. Backlogs of work nonetheless fell for the fourth consecutive month, thereby suggesting a lack of pressure on business capacity,' the PMI said. The PMI also showed a deceleration in input price inflation, with the index easing to its lowest level since December last year. Some of the firms surveyed cited lower energy prices as the key reason for the slowdown in input inflation. However, despite this, output price inflation accelerated, as manufacturers passed on some cost increases and maintained margins. The PMI said business activity expectations for the year ahead improved further from the low point seen in April, with confidence hitting a five-month high despite concerns about rising global economic uncertainty. "Despite ongoing tariff uncertainty, Irish manufacturers maintained a broadly positive assessment of the outlook for activity levels over the coming year. Around 44% of the respondents predict a rise in output levels during the year ahead, while 8% expect a decline,' Mr McNamara said. Optimism was mostly linked to new business initiatives and greater investment spending, although some firms still noted US tariffs and elevated global economic uncertainty had the potential to adversely affect business performance. Read More Grocery prices now rising three times faster than other goods
Otago Daily Times
28-06-2025
- Science
- Otago Daily Times
No Matariki cluster but beautiful sunrise
The crowd were still treated to views of other stars and planets. PHOTOS: SUPPLIED Waitaki District Council hosted its annual stargazing event with Māori astronomer David McNamara last week as part of Matariki celebrations. Between 25 and 30 people gathered at Cape Wanbrow Lookout to try to catch a glimpse of Matariki or Puanga star clusters last Thursday morning. Unfortunately, it was mostly covered by the clouds, Waitaki District Council community educator and engagement officer Lisa Jane Potaka-Ross said. "However, other parts of the sky were clear with excellent visibility and star guide Damien McNamara was able to point out stars, planets and galaxies and share knowledge of what could be seen from a te ao Māori perspective. Clouds impeded a group from seeing Matariki or Puanga from Cape Wanbrow Lookout last week. "To close the event, those gathered sang a selection of waiata, still hoping that the beloved Matariki cluster might make a show but treated instead to the first rays of a beautiful sunrise." This was the fifth time a stargazing event has been held and Ms Potaka-Ross was pleased to see a mix of first-timers and those returning. "Clearly it is becoming a whānau tradition for some. "Numbers were slightly down but there have been several Matariki celebrations in the community this year so people are choosing which events they wish to attend to mark the occasion. "The time of Matariki, the Māori new year, and the public holiday that we now observe are coming to be celebrated by all New Zealanders as authentic and unique to our people and our place on the planet."
Irish Examiner
11-06-2025
- Business
- Irish Examiner
Mortgage rates drop but Ireland remains amongst the most expensive in Europe
The average interest rate on new Irish mortgage loans remains amongst the highest in Europe despite a drop of 52 basis points in the past year. New data from the Central Bank shows the average mortgage rate now stands at 3.72%, down from 3.77% in March. The rate in Ireland exceeds the euro area average by 38 basis points with Ireland climbing one place to fifth in the euro area ahead of Germany, the Netherlands, Greece and Luxembourg. The Central Bank said the average rate on fixed-rate mortgages, which constitute 81% of the volume of new loans, was 3.55% in April, three basis points lower than March 2025 and 58 basis points lower than in April 2024. Trevor Grant, chairperson of the Association of Irish Mortgage Advisors, said Ireland remains expensive for mortgages despite the recent falls, but said there may be hope of average rates dropping below 3%. "The ECB rate cut earlier this month could see average mortgage interest rates continue to fall in Ireland in the coming months, meaning sub-3% mortgage rates could become more widely available in Ireland. Earlier this month, Avant Money became the first lender to start offering sub-3% mortgage rates here," he said. "This marks the first time mortgage rates have dipped below the 3% threshold since 2022, marking a significant milestone for Irish borrowers. We'd expect more lenders to follow suit, with homeowners and house buyers set to enjoy substantial savings on their mortgages as a result." Read More David McNamara: ECB ready to take a pause on rate cuts
