Irish industrial production rose 20% in the first four months of 2015 while construction fell 2.6% in the first quarter according to data today from the CSO.
Production for Manufacturing Industries for April 2015 was 1.7% higher than in March 2015. On an annual basis production for April 2015 increased by 9.7% when compared with April 2014. The seasonally adjusted volume of industrial production for Manufacturing Industries for the three months February 2015 to April 2015 was 17.4% higher than in the preceding three month period.
The “Modern” Sector, comprising a number of high-technology and chemical sectors, showed a monthly decrease in production for April 2015 of 1.1%. There was a monthly increase of 4.7% in the “Traditional” Sector.
There was an increase of 5.4% in the seasonally adjusted industrial turnover index for Manufacturing Industries in April 2015 when compared with March 2015 (see above and tables 5a to 5d). On an annual basis turnover increased by 22.9% when compared with April 2014.
The CSO said that the volume of output in building and construction decreased by 2.6% in the first quarter of 2015 when compared with the preceding period. This reflects a decrease of 5.6% in the volume of residential building work.
There were increases of 7.9% and 1.3% respectively in the volume of civil engineering and non-residential building work*. The change in the value of production for all building and construction was +1.8%.
On an annual basis, the volume of output in building and construction increased by 1.4% in the first quarter of 2015*. There was an increase of 7.0% in the value of production in the same period. The annual rise in the volume of output reflects year-on-year increases of 21.8% and 3.4% respectively in residential building and non residential building work. The volume of output in civil engineering fell by 1.3% in the year to Quarter 1 2015.
*The CSO said that given the unprecedented low base this series is starting from, the CSO will continue to monitor the quality and comparability of this new data series.
Conall Mac Coille, Davy chief economist, commented: Irish industrial production up 20% year-to-date
Irish industrial production data, released June 10th, show another robust 1.3% rise on the month, with output up 9.4% on the year. This represents a slowdown in the annual growth rate from 27.1% in March, concentrated in the ‘modern’ sector. But the bigger picture is that industrial output is up by an enormous 20% in the first four months of 2015 compared with last year, with the weak euro and stronger demand helping growth.
The strength in Irish manufacturing is not limited to multinational companies. ‘Traditional’ sector output rose by 4.7% on the month, up 11.3% in the year to April. Overall, ‘traditional’ sector output has increased by 10.4% in the first four months of 2015 compared to last year. For example, output of food products and beverages is up 10.5% in the year to April.
PMI surveys point to further strength in manufacturing
Ireland’s manufacturing PMI rose to 57.1 in May, up from 55.8 in April, a three-month high. That was the strongest reading across the 25 developed and developing economies that publish PMI surveys for manufacturing. Irish manufacturing companies reported that export orders rose sharply in May, with the weak euro helping demand. Indeed, monthly trade data show nominal goods exports up 17.4% in the first quarter, split between a 25% gain in pharmaceuticals and an 11% rise in other goods. So Ireland looks set to enjoy a strong year of growth in both manufacturing and exports in 2015.
Temporary slowdown in construction activity
Construction data released today for Q1 2015 are a little disappointing, showing output down -2.6% on the quarter, up just 1.4% year-on-year. The contraction in Q1 appears to have been led by residential construction which fell by 5.6%, albeit still up 21.8% year-on-year (Table 2). Hopefully, this weakness is temporary. The Irish construction PMI survey bounced back sharply in May to 63.3, up from the trough of 52.0 in February, led by a rebound in the homebuilding component.