Increase in factory output led by traditional sector
The run of positive indicators for the economy has continued, with official figures published yesterday showing another large increase in output from Irish factories in April.
The CSO said that production rose in the month by 1.7% from March and was 9.7% higher from April 2014.
That 9.7% annual increase was lower than the huge increases of over 27% and almost 37% posted in March and February, but nonetheless showed that manufacturing output was expanding at a fair clip, analysts said.
The so-called traditional sector of the economy, which includes many Irish-owned businesses that employ comparatively more people fared well, increasing output 4.7%. Output in the modern sector of the economy, including foreign-owned chemical, pharmaceutical and computer firms, shrank 1.1% in April from March.
A breakdown of monthly output figures by company type showed traditional sectors such as food products and beverages and the category of ‘other’ food products posted significant rises in output in March—the most recent month for which figures are available.
Computer, electronic and optical equipment and chemicals and pharmaceutical companies also boosted output by significant amounts in March, according to the CSO figures.
Forecasters have predicted demand for exports will help drive output from Irish-based factories in the coming months. The Investec Purchasing Managers’ Index for May, published at the start of this month, projected that manufacturing demand would stay strong through the rest of this year.
The Economic and Social Research Council, in its quarterly outlook published yesterday, forecast that the economy would start benefiting from an increase in domestic demand and spending by consumers, and not only from exports.
Alan McQuaid, chief economist at Merrion Capital, said the April output figures “were again very positive”.
“After a sluggish start to the year, we expect the global economy to pick up speed in the coming months and demand for Irish goods in general should increase as a result, with currency developments, particularly in relation to the euro/ dollar a huge plus,” he said.
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