A round-up of other business news in brief...
US economy shrank 3.8% in fourth quarter
The US economy shrank at its fastest pace in nearly 27 years in the fourth quarter, government data showed, sinking deeper into recession as consumers and business cut spending.
Gross domestic product, which measures total goods and services output within US borders, plummeted at a 3.8 per cent annual rate, the lowest pace since the first quarter of 1982, when output contracted 6.4 per cent.
GDP fell 0.5 per cent in the third quarter. These were the first consecutive declines in GDP since the fourth quarter of 1990 and the first three months of 1991.
For 2008, GDP rose 1.3 per cent, the slowest pace of growth since 2001, when the economy expanded 0.8 per cent.
The Commerce Department report showed consumer spending, which accounts for two-thirds of US economic activity, fell 3.5 per cent in the fourth quarter after declining 3.8 per cent in the third quarter. – (Reuters)
More time for Thomas Read
The court-appointed examiner of the Thomas Read companies, which operate 21 of Dublin’s best-known pubs and restaurants, has secured High Court approval for more time to finalise survival proposals for the companies.
The 14 companies, owned by Sharmane Ltd, the parent company of the Thomas Read Group, have combined debts of €26 million but have a reasonable prospect of survival providing certain conditions are met, the court previously heard.
The matter was mentioned in the High Court yesterday when Lyndon MacCann SC, for the examiner, Kieran McCarthy of Hughes Blake accountants, asked for an extension of court protection to February 24th next.
Dexia to cuts 900 jobs this year
Dexia SA, the world’s largest lender to local governments, will cut about 900 jobs this year to reduce costs after an estimated €2.3 billion fourth-quarter loss. Dexia plans to stop proprietary trading and focus on public finance in its main markets of France, Belgium and Luxembourg, the Paris- and Brussels-based company said today.
Dexia will take less risk in its trading activities and concentrate them in Brussels and Dublin. The bank will stop public finance operations in Australia, Eastern Europe, Mexico and Scandinavia and reduce lending to local governments in the UK and the US.
The job cuts, which amount to about 3 per cent of staff, will lead to savings of €200 million in 2009, it said. There was no comment on whether any jobs in Dublin will be affected. – (Bloomberg)
Japan’s industrial output down 9.6%
Japanese industrial production fell a record 9.6 per cent in December, while core annual inflation almost evaporated, reinforcing expectations of a record economic contraction as the global financial crisis worsens.
Unemployment hit a three-year high, household spending dipped, and manufacturers saw no quick turnaround in the outlook for industry – the main driver of the world’s second-biggest economy – as inventories hit record highs despite factory closures and lay-offs.
Subsiding inflation and worsening economic conditions are also stoking deflation worries, as in other major economies, which may prompt more central bank steps to support the staggering economy and free up frozen credit markets that are starving key companies of cash.– (Reuters)
Roche cuts price of bid for Genentech
Roche cut the price of its bid for outstanding shares in Genentech, going hostile and dashing investor hopes of a sweetened offer for the 44 per cent of the US biotech group its does not already own.
Roche Holding’s new and lower offer, pitched directly to shareholders, was a surprise. – (Reuters)
