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Ireland's industrial production slumped in May - but plastics, construction materials rose

Food production down by nearly a third from a year ago because of exposure to shut restaurants, pubs and events


Food production down by nearly a third from a year ago because of exposure to shut restaurants

Food production down by nearly a third from a year ago because of exposure to shut restaurants

Food production down by nearly a third from a year ago because of exposure to shut restaurants

Production of timber products and other construction materials has surged as sites reopen. So have plastics as thousands of firms erect anti-virus screens in their premises and vehicles.

But those are the lone bright spots in the latest manufacturing statistics published today. The Central Statistics Office (CSO) has found that industrial production in May slumped nationwide in virtually all other manufacturing sectors, most sharply among indigenous firms.

Overall, industrial production was 11.6pc lower in May than a year ago, and 10.5pc lower than in April. But production was a staggering 27.1pc lower than in May 2019 for ‘traditional’ industries where Irish firms are concentrated.

Food production overall in May was nearly 30pc lower in volume terms than a year ago. This reflected many food preparation firms’ exposure to supplying restaurants, pubs, venues and live events that are only now starting to reopen.

A closer look at the food figures showed that - while beef and dairy production was down in annual terms by 6.6pc and 5.6pc respectively – other forms of food production were 38.4pc lower than in May 2019.

“These figures show how the Irish supply chain is disrupted when hospitality shuts down,” said Ibec chief economist Gerard Brady. “It also shows how much these firms sell into consumer-facing sectors in the UK and Europe.

“Everyone in the prepared food space and in their supply chains is hurting. Demand for firms making prepacked meals like sandwiches disappeared when people were off the roads,” he said.

Conversely, production of plastics and rubber products was 41.4pc higher in May than a year before, and 34.5pc higher than the month before.

Mr Brady said this growth was more likely driven by medtech firms’ use of complex polymers in manufacturing medical equipment than in Covid-19 protection screening.

Yet the overall figures for ‘modern’ firms – the label used for production mainly by the 1,500-plus multinational firms based here – also showed a 4.7pc production decline from May 2019 and a monthly drop of 10.9pc.

Mr Brady attributed the multinationals’ lower production numbers partly, again, to medtech firms.

“We may intuitively assume that in a health crisis, demand for all medtech products is higher – but this is absolutely not the case,” he said, noting that demand is down for such Irish-made products as artificial joints and pacemakers. “Globally most countries have suspended elective surgeries, so for a lot of medtech companies, their demand has temporarily disappeared.”

The effect of the May 18 reopening of construction sites is clearly shown in the CSO figures.

Demand versus April leaped by 62pc for wood products, and 69pc for a range of construction materials including sand, gravel, cement and concrete.

Mr Brady said he expects overall industrial production figures for June and July to rise in line with business reopenings – but doubts they will return to pre-crisis levels in February.

“We’re starting to see the momentum shift in the monthly figures. The key question is where they settle in the next six to eight weeks,” he said. “Demand is extremely uncertain as firms reopen with no idea, really, how consumer behaviour will respond.”

Online Editors