We're setting pace for industrial growth but confidence remains low
Latest European data puts Ireland ahead of Germany
Published 13/10/2011 | 05:00
GROWTH in Ireland is running ahead of even Germany in terms of industrial output, according to the latest European Union data.
Figures published yesterday show that industrial production across the euro area rose unexpectedly in August, the second surprise rise in factory activity in a row.
Ireland is among the countries setting the pace for growth, according to the August data which was published by the European statistics agency Eurostat.
Industrial production was up 23pc in Estonia, 10pc in Ireland and 7.8pc in Germany in August 2011, compared to the same month a year earlier.
The monthly statistics can be volatile, according to economist Brian Devine of NCB Stockbrokers.
However, he said taking the past three months together showed Irish output up by 1.8pc compared to last year.
August data shows production in the 17-nation euro area was up 1.2pc from July. It's the biggest gain since November 2010.
Economists had been forecasting a drop of 0.8pc.
In the year, output increased 5.3pc.
In Germany, Europe's biggest economy, industrial output fell by 1pc in August compared to July, when it had risen 3.9pc.
In France, the numbers are better. Production rose by 0.6pc. Greece reported a drop of 1.4pc in output.
The latest industrial statistics show industrial activity holding up, even though financial markets' sentiment has been battered by the fallout from the debt crisis for months.
Yesterday, European Commission president Jose Manuel Barosso battled to stem the crisis with plans to reform the European banking sector.
Even the slowdown in Germany from a position of strength and output in August was well up on the previous year.
It is a rare piece of good news after other recent data showed manufacturing output contracted in September.
Economic confidence in Europe is at the lowest ebb for almost two years.
The International Monetary Fund (IMF) has already cut its growth forecasts for Europe in 2011 and 2012. "The outlook for the world's major economies is continuing to darken," said Alan McQuaid, chief economist at Bloxham Stockbrokers, in an e-mailed note before yesterday's report.
"Many major western economies are teetering on the brink of recession as they struggle to repay inflated levels of debt."
Particularly worryingly for Ireland data from the UK shows unemployment running at a 15-year high.
The UK is Ireland's most important trading partner.
NCB's Brian Devine says Ireland's numbers are positive but warns it will be difficult to sustain growth in a global slowdown. He said the world was not on the brink of a 2008-style recession, however.
"Company and household budgets are in better shape. If the political issues are contained we should see a slowdown but not an all-out recession," he said.
The euro strengthened against other currencies yesterday, trading at US$1.3793 at one stage.
The single currency was also higher against the pound. (Additional reporting Bloomberg)