Irish Economy 2014: Industrial production for
June 2014 covering the manufacturing sector was 18.2% lower than in May 2014. On
an annual basis production for June 2014 increased by 3.5% when compared with
June 2013. The seasonally adjusted volume of industrial production for
Manufacturing Industries for the three months April 2014 to June 2014 was 12.8%
higher than in the preceding three month period - - again we see here that the
monthly PMI (purchasing managers' index) data while indicating a trend should
not be assumed that it impacts the national accounts.
On an annual basis production for May 2014 increased by 32.3% when compared with May 2013.
The CSO said today that the “Modern” Sector,
comprising a number of high-technology and chemical sectors, showed a monthly
plunge in production for June 2014 of 27.4%. There was a monthly decrease of
1.1% in the “Traditional” Sector.
There was a decrease of 9.1% in the seasonally
adjusted industrial turnover index for Manufacturing Industries in June 2014
when compared with May 2014. On an annual basis turnover increased by 3.3% when
compared with June 2013.
In the dominant foreign-owned chemical sector
it's clear that work-in-progress is not tracked.
economist at Davy, commented: "Unsurprisingly,
some of the spectacular growth in industrial production seen earlier in H1 was
unwound in May and June. Output fell 18.2% on the month (+3.5% yoy) in June
following a 3.2% contraction in May. These consecutive monthly declines unwound
some of the sharp rises in output in the preceding months, but output was still
up 12.8% on the quarter in Q2 and 24.1% yoy.
As ever, volatility in the pharmaceutical sector has driven swings in the
industry data. Modern sector output, encompassing pharmaceuticals, fell a
massive 27.4% month-on-month in June (-2.4% yoy). However, output was up 20.5%
on the quarter and 28.2% on Q2 2013, suggesting that the worst of the patent
cliff may now have passed. Last month’s data were also the first to incorporate
methodological changes and reweighting of sectors, adding further volatility.
More encouraging is the news that output in the traditional sector has grown by
11.5% in the year to June. The traditional sector accounts for two-thirds of
overall employment in Irish industry. On the quarter, output was up 5.5% in Q2,
a 13.8% yoy rise. So industry now looks set to make a strong positive
contribution to Irish GDP growth in the second quarter."