Irish industrial production for May 2014 was 2.5%
lower than in April 2014. On an annual basis production for May 2014 increased
by 32.3% when compared with May 2013. The seasonally adjusted volume of
industrial production for Manufacturing Industries for the three months Mar 2014
to May 2014 was 17.9% higher than in the preceding three months - - using a base
year=2010 changed from a base year of 2005, production is up 16.4% in the period
2010-2014 while turnover is up 19.3%.
The CSO said the “Modern” Sector, comprising a
number of high-technology and chemical sectors, showed a monthly fall in
production for May 2014 of 0.7%. There was also monthly drop of 0.8% in the
There was an increase of 1.3% in the seasonally
adjusted industrial turnover index for Manufacturing Industries in May 2014 when
compared with April 2014 . On an annual basis turnover increased by 18.9% when
compared with May 2013.
Conall Mac Coille, chief
economist at Davy, commented : "Overall, today’s Irish
industrial production data are good news. The pharmaceutical sector appears to
be bouncing back, with output continuing to recover in indigenous domestic
That said, the spectacular 32.3% growth in manufacturing output in the year to
May probably overstates the true improvement in conditions, reflecting
volatility and highlighting the risk of further revisions going forward. Today’s
data were the first to incorporate methodological changes and reweighting of
sectors - - raising the probability of future revisions.
The pick-up in manufacturing output has been largely driven by the
pharmaceutical sector, where output is up 72% on the year. Modern sector output,
dominated by multinationals, is up 51% year-on-year. On the way down, the
negative impact of the pharmaceutical patent cliff had little traction on the
domestic economy. So we would not expect the rebound in
pharmaceutical output this year to have much positive impact on consumer
spending or employment in 2014.
But at least the pharmaceutical sector will not artificially distort downwards
Irish GDP growth this year, having driven a wedge between the 0.2% GDP growth
recorded in 2013 and the 3.2% rise in GNP (excluding a 14% fall in multinational
sector profits). Industry now looks set to make a strong positive contribution
to Irish GDP growth in the second quarter. If output is flat in June,
manufacturing production will have grown by 18% quarter-on-quarter in Q2 2014.
More encouraging is the news that output in the traditional sector has grown by
19.3% in the year to May. The traditional sector accounts for two-thirds of
overall employment in Irish industry. The food sector is performing well, with
output of food products and beverages up 3.5%; basic metal and fabricated metal
products are up 13.1%; and output of tobacco, coke and refined petroleum
products is up 41.3% on the year. These developments suggest that employment in
Irish industry should continue to expand. However, the
eye-catching 19% growth in traditional sector output could well be revised down
in the future."