Business Irish

Thursday 18 January 2018

April rise in Irish output raises hopes of recoveryIreland's industrial output continues to grow despite deepening of slump across eurozone

Picture posed. Photo: Thinkstock
Picture posed. Photo: Thinkstock
Thomas Molloy

Thomas Molloy

INDUSTRIAL production in Ireland rose in April from March, adding to evidence that the domestic economy is recovering despite the slump across Europe.

Production among the manufacturing industries advanced 1.33pc from March and jumped 2.2pc from the same month last year, the Central Statistics Office said yesterday.

The new data confirms trends seen in the more up to date NCB survey of purchasing managers which has shown growth in May, April and March.

The NCB figures show that the rate of growth is rising with each passing month.

A similar index for the eurozone as a whole showed contraction for the tenth month running.

The CSO said yesterday that the seasonally adjusted volume of industrial production for manufacturing industries for the three-month period from February to April was 1.2pc higher than in the preceding three-month period.

Economists often look at the three-month average because the monthly changes can be erratic.

The "modern" sector which includes the hi-technology and chemical sectors, showed a monthly increase of 2pc in April, while the traditional sector, which involves many locally owned companies which tend to employ most of the workforce, advanced 2.5pc.

The seasonally adjusted industrial turnover decreased by 4.2pc in April from the previous month. On an annual basis, turnover decreased by 3.6pc when compared with April 2011.

The news was grim elsewhere in the eurozone as new data showed its services and manufacturing output contracted at the fastest pace in almost three years in May, adding to signs the European economy is suffering under the worsening sovereign debt crisis.

A composite index based on a survey of purchasing managers in both industries dropped to 46 from 46.7 in April. While above an initial estimate of 45.9, the May reading is the lowest since June 2009.

The indicator has remained below 50 -- indicating contraction -- for four months.

European companies are cutting back on hiring and spending as the intensifying fiscal crisis makes the economic outlook more uncertain.

While the 17-country euro area narrowly avoided falling into a recession in the first quarter, unemployment has reached the highest on record and economic confidence is at its lowest level since 2009.

The data point "to markedly contracting activity and further weakness ahead", said Howard Archer, chief European economist at IHS Global Insight in London.

"It is odds-on that the eurozone is headed for renewed and appreciable contraction in the second quarter."

The euro extended declines against the dollar after the data and traded at $1.2420 at 11:04 am in Brussels, down 0.6pc on the day and near a two-year low.

Irish Independent

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