With an ageing population that will bring with it a whole host of challenges for the State, there was one more problem added to the list this week when Mercer reported that the pensions “hole” in Ireland’s largest companies has almost doubled.

The widening of the gap, according to the company which tracks the pension position of Ireland’s largest listed companies, occurred in just the first seven months of the year. Those pesky “volatile markets” were blamed again.

“We saw some easing of the situation towards the end of last year but, since then, it has tumbled and it now looks as though interest rates and bond yields will be lower for longer than we might have anticipated,” said Mercer’s Séan O’Donovan.

At the start of the year, there was a deficit of just under €3 billion in the pension schemes of these large Iseq-20 companies – a group that includes CRH, Ryanair, Kerry Group, Paddy Power Betfair and Bank of Ireland. By the end of July, this had jumped by 97 per cent to €5.7 billion.

There was better news for staff at the Central Remedial Clinic (CRC) following the collapse of their private pension plan. After a long-running saga and the threat of industrial action, the Government decided to admit them to a public scheme.

New legislation will be required following the surprise move which came after the CRC presented a business case to the Government which said many staff had been given no choice before being signed up to the private plan, which grew a deficit of €2.3 million.

In response, the HSE told the CRC no public funding would be made available to shore up the private scheme, but “pension provisions in respect of the former active members of the CRC plan would be provided by way of access to SPSPS for future service only”.

Construction turnaround?

Currently though, the most pressing issue facing the Government remains the housing crisis. There would, however, appear to be some movement, as the Ulster Bank construction purchasing managers’ index reported a sharp rise in activity during July.

The key index designed to track overall activity rose to 61, from 59.7 in June, signalling strong growth. Total activity has now risen in each of the past 35 months. Despite Brexit fallout, confidence remains strong, with 58 per cent expecting expansion to continue.

Jobs-wise, employment continues to grow in the sector with rising workloads encouraging companies to take on extra staff and increase their purchasing activity. The strongest performing sector was commercial construction, which grew at its fastest since February.

The survey also said housing activity continued to rise at a sharp pace, although another survey, this time from GeoDirectory, said that while mortgage drawdowns and approvals are on the rise, the Irish property market is still far from “normal”.

The figures in the survey show that activity rates across the country remain far below the rate that would be expected. Indeed, it points to a three-tier property market, with Dublin boasting the highest house prices and the highest turnover rates, followed by commuter counties and other urban areas such as Cork and Galway. In the third tier are rural counties such as Leitrim and Longford.

The Construction Industry Federation presented the Government with its pre- budget submission this week, which argued that poor infrastructure is hindering house building.

It called for increased spending on the construction of housing, roads, water treatment facilities and other services in next October’s budget. It also identified zoned lands in Dublin that could hold up to 13,000 new homes but cannot because they lack roads, water and waste services.

Everything boiled down to a call for “extensive investment” in infrastructure in the shape of an increase of €1 billion in construction spending. The body said this would yield 10,000 new construction jobs.

In terms of the houses we do have, the mortgage market is moving again, albeit at a muted pace. The Banking & Payments Federation Ireland (BPFI) this week said mortgage drawdowns are growing strongly in the second quarter of the year.

The figures show that 6,803 mortgages, to a value of €1.29 billion, were drawn down in the second quarter of 2016, an increase of 24.9 per cent in volume and 28.8 per cent in value compared with the first quarter of the year.

It is the highest second quarter drawdown figure since 2010. On an annual basis, the number of mortgages drawn down rose by 11.2 per cent from the second quarter of 2015, while the value jumped by 17.9 per cent.

Meat inversion

The Republic’s corporate tax gravy train picked up its latest passenger this week as Brazilian food company JBS, the largest meat producer in the world, pulled the trigger on a plan that will see more than €30 billion worth of its assets shifted to Dublin.

In May, the meat giant – which has annual sales of about $45 billion – incorporated a Dublin company, JBS Foods International, which is headquartered at the offices of A&L Goodbody in Dublin’s docklands.

Although JBS will be domiciled in the Republic, it will not be run from here, similar to the structure of scores of other multinationals, mostly US tech and pharma groups, that have relocated here in tax-driven deals.

The domestic beef and leather business will remain in the ownership of the entity that is currently listed in Brazil, which the same shareholders will also own. JBS says the Irish company will then effectively become the “ultimate parent” for the global group.

Thankfully for the Republic, the move is unlikely to affect the State’s GDP figures and by extension its contribution to the EU’s budget.

Davy analyst Conall Mac Coille said the redomiciled assets were likely to be classified in the national accounts as "direct investment abroad", which would have no impact on domestic economic activity as captured by GDP.

Brexit decline

The seemingly endless flow of Brexit-related news seemed to ebb ever so slightly this week, but Davy signalled it is likely to cut its 2017 Irish growth forecasts for the Republic.

The securities firm, which currently estimates gross domestic product will expand 4 per cent this year, said it is monitoring short-term economic indicators for any negative impact from the vote.

There might be better news coming down the road for the State as a record number of UK solicitors were admitted to practice in the Republic in the first six months of 2016 due to concerns over Brexit.

Recent Law Society figures show 186 solicitors were admitted to practice here from January to June, compared to fewer than 50 for the same period last year. Some of the UK’s biggest law firms, including Freshfields, Hogan Lovells, Slaughter and May and Allen & Overy, have all reportedly registered solicitors locally.

International law firm Pinsent Masons has instructed a Dublin commercial property agent to find a 10,000sq ft office space for it, according to a report. The firm, which already has a presence in Belfast, is one of a number of UK-based law firms believed to be considering a Dublin base.

The Bank of England, meanwhile, released a survey on Wednesday showing business services growth and consumer spending slowed last month, partly due to Brexit.

The findings of its August regional agents’ survey in last week’s quarterly Inflation Report showed companies expected the referendum would have a negative effect on capital spending, hiring and turnover over the coming year.