Monthly Economic Bulletin - January 2004

ECONOMIC GROWTH (VOLUME)

According to Central Statistics Office data, the y-o-y increase in GDP at constant (1995) market prices in 2002 was 6.9% while the corresponding increase in GNP was 0.1% The following table shows growth in GDP and GNP in constant (1995) prices and the corresponding annual values in current market prices.

*preliminary

These figures represent the average of the expenditure and output estimate of GDP and GNP respectively.

According to the latest CSO figures, which are preliminary estimates, GDP grew by 2.1% year-on-year in the second quarter of 2003. GNP was estimated to have grown by 3.1% year-on-year in the same period. The figures for the first quarter were 0.7% for GDP and 1.0% for GNP.

BUDGET INDICATORS

Exchequer Balance

The 2003 Exchequer Balance showed a deficit of €980 million, which compares with the Budget 2003 target of a deficit of €1,869 million. In 2002 there was an Exchequer surplus of €95 million.

General Government Balance

The estimated outturn for the General Government Balance (GGB) in 2002 is a deficit of 0.2% of GDP on an ESA 95 basis. The 2003 estimate for the GGB is a deficit of 0.1% of GDP.

General Government Receipts and Expenditure*

* rounding may affect totals

An advance release calendar for central and general government - one quarter in advance - is available on the IMF Dissemination Standard Bulletin Board (details below).

General Government Debt

Ireland’s General Government Debt to GDP ratio was 32.4% at end-2002.  The outturn at end-2003 is estimated to be 33.1% and the forecast for end-2004 is 33.3%.

BALANCE OF PAYMENTS – CURRENT ACCOUNT

There was a deficit of €316 million on the current account of the Balance of Payments in the third quarter of 2003. This compares with a deficit of €310 million in Q3 2002. The deficit in Q3 2003 was due to debit balances under the Services heading and the Income heading, as well as in Current Transfers, which more than offset the credit balance under the Merchandise Trade heading.  The current account deficit for the year 2002 was €954m compared to a deficit of €757m for 2001.

EMPLOYMENT

Labour Force Survey / Quarterly National Household Survey

Live Register

The Live Register figure for November 2003 was 164,541.  This is a fall of 2,011 on the figure for October 2003 and an increase of 5,905 on the figure for November 2002. The underlying seasonally adjusted figure in November 2003 was 170,400, which represents an increase of 5,800 on the figure for November 2002 and a fall of 2,200 on the seasonally adjusted figure for October 2003.

Building and Construction Employment

Figures in the QNHS indicate that employment in construction rose by 9,000 or 4.7% in the 12 months to the quarter June to August 2003. The CSO’s index of “Employment in Construction” release indicates that construction employment increased by 0.5% year on year to October 2003.

Other Production

Industrial Employment (Preliminary Estimates) indicates that industrial employment decreased by 14,800 in the twelve months to September 2003.

Banking, insurance and building societies

Banking, Insurance and Building Societies: Employment and Earnings indicates that employment in banking, insurance and building societies increased by 900 in the twelve months to June 2003. Figures in the QNHS indicate that employment in “financial and other business services” increased by 900, or 0.4% in the 12 months to the quarter June to August 2003.

Public sector employment

Notified redundancies

FÁS Training and Employment Programmes

At end October 2003, there were 25,522 people in FÁS Employment Schemes (incl. 19,588 on Community Employment). There were a further 11,298 on training programmes / schemes for the unemployed and jobseekers. The corresponding figures for those in FÁS Employment Schemes for October 2002 was 29,794 (incl. 24,380 on Community Employment) and 14,044 were attending the various other training programmes / schemes. 

EARNINGS

Industrial Earnings

The latest CSO release shows that average weekly industrial earnings in the year to September 2003 increased by 5.7%, reflecting an increase of 4.0% in the hourly rate and an increase of 1.8% in the number of hours worked.  Average weekly industrial earnings in June 2003 were €537.19.

The corresponding average increases for the manufacturing sector were 4.7% (weekly), 2.9% (hourly) and a 1.8% increase in hours worked, with weekly earnings of €512.31.

The earnings of all employees in the industrial sector rose by 5.7% to €625.09 in the year to September 2003.  Clerical and managerial employees matched the 5.7% increase recorded by industrial employees.

Construction

According to the latest CSO release, average weekly earnings for all workers in the construction sector increased by 1.7% to €675.37 in the year to September 2003 - the hourly rate increased by 3.9% while the number of hours worked fell by 2.2%.  In the same period, average weekly earnings of skilled operatives decreased by 2.6% to €773.99, while for unskilled/semi-skilled workers there was a 3.8% increase to €667.93.

Banking, Insurance & Building Societies

The CSO Statistical Release, Banking, Insurance and Building Societies: Employment and Earnings, indicates that average weekly earnings in the financial sector decreased by 0.2% to €707.81 in the year to June 2003.

Public Sector

The latest CSO figures show that average weekly earnings in the public sector (excluding health) increased by 4.5% to €730.92 in the year to June 2003.

Distribution and Business Services

The latest CSO release indicates that average weekly earnings in the Distribution and Business Services sector increased by 5.3% to €586.28 in the year to June 2003.  Average weekly earnings in the Distribution sector increased by 7.6% to €604.95 while those in the Business Services sector increased by 4.0% over the same period to €576.12.

INFLATION AND INTEREST RATES

Inflation

The latest CSO figures show that the rate of inflation, as measured by the Consumer Price Index (CPI) moderated further in November 2003 to 2.2%, compared to 2.3% in October, its lowest level in four years. Excluding mortgage interest rates, the underlying CPI was 3.1%. The CPI excluding tobacco was 1.7%. Inflation averaged 3.9% for the first three quarters of the year. The forecast for inflation growth in 2003, as measured by the CPI, is 3.5 per cent, as published in Budget 2004 on the 3^rd of December.

As measured by the EU Harmonised Index of Consumer Prices (HICP), Ireland’s annual inflation rate was 3.3% in November, the same as that recorded in October. Euro area inflation in November was 2.2 %, up from 2.0% in October.

Manufacturing Output Prices

In November 2003, manufacturing output prices decreased by 8.4% y-o-y.  The prices for home sales rose by 0.5% y-o-y, while export sales prices dropped by 10.3% y-o-y.

Interest Rates

The EURIBOR one-month interbank rate on 31 December was 2.10%, down from 2.15% at the end of November, while the EURIBOR three-month interbank interest rate at 31 December was 2.124%, down from 2.15% at end of November. 

Ten-year Irish Government bonds (04/2013) traded at close of 31 December at a yield of 4.26% compared to 4.286% for the equivalent German Government bonds (01/2014). The European Central Bank’s Repo rate at end of November was 2.00%.

House Prices

Department of the Environment, Heritage and Local Government figures show that the average price of new houses nationwide in 2002 rose by 8.3% to €198,087 while the average price of second-hand houses rose by 10.5% to €227,799. In Dublin, average new house prices rose by 5.4% to €256,109 while average second-hand house prices rose by 11% to €297,424.

In the second quarter of 2003, average new house prices nationwide rose by 13.0% y-o-y to €222,532 while average second-hand house prices rose by 16.6% to €264,646.  In the same period, average new house prices in Dublin increased by 14.5% y-o-y to €289,345 while average second-hand house prices in Dublin increased by 23.4% to €367,314.

PERSONAL CONSUMPTION

Retail Sales

In the month of October 2003, the volume of sales increased by 1.0% y-o-y, with sales excluding Motor Trades recording a rise of 2.4%.  The volume increase in sales in the January-October period over the same period in 2002 was 1.0% while the corresponding increase excluding Motor Trades was 1.7%.  The volume increase in sales in 2002 was 0.8% compared to an increase of 3.1% in 2001.  The corresponding increase excluding Motor Trades in 2002 was 2.2% compared to an increase of 7.5% in 2001.

Car Registrations

Data from the Revenue Commissioners indicates that new car registrations in November 2003 were down 15.3% on November 2002 while sales of imported used cars in November 2003 were 16.1% higher y-o-y.  Cumulative sales of new cars for the period January-November 2003 showed a y-o-y decrease of 6.5% while cumulative sales of imported used cars increased by 5.5%.

OUTPUT AND EXPORTS

Manufacturing Output

Manufacturing output declined by 3.2% y-o-y in September 2003, but was 6.0% higher y-o-y for the 3-month period July-September 2003. The CSO provisionally estimates that output grew by 12.6% y-o-y in October.  According to CSO data, manufacturing output volume grew by 8.4% in 2002, following a 10.2% increase in 2001.

Exports

First estimates from the CSO indicate that the value of exports in the month of October 2003 increased by 0.2% y-o-y.  Detailed figures show that, for the period January-September 2003, in value terms, exports were down 16% y-o-y, including: organic chemicals down by 19%; medical and pharmaceutical products down by 10% and office machines etc. down by 18%.  Exports of food and live animals fell 2%.  In volume terms, it is estimated that exports fell by 9.8% over the same period.

TOURISM

According to CSO figures, there were 6,065,000 overseas visitors to Ireland in 2002, an increase of 1.3% over 2001.  The number of visits abroad by Irish residents was 4,634,000 in 2002, compared with 4,216,000 in 2001, an increase of 9.9%.  Earnings from overseas visitors to Ireland in 2002 amounted to €3,764 million, an increase of 1.7% over 2001.  Expenditure by Irish visitors abroad amounted to €3,956 million in 2002, an increase of 23.2% over 2001.

In the third quarter of 2003, there were 2,187,000 overseas visitors to Ireland, compared with 2,045,000 in the same period in 2002, an increase of 6.9%.  The number of visits abroad by Irish residents in Q2 2003 was 1,593,000, an increase of 2.5% when compared with the third quarter of 2002.

AGRICULTURE

Output

The CSO release Output, Input and Income in Agriculture 2003 Advance Estimate indicates that agricultural output at basic prices increased by 2.1% in 2003.  This follows a decrease of 3.6% in 2002.

Farm Incomes

The same CSO release shows that aggregate farm incomes grew by 2.2% in 2003, largely as a result of increases in the value of output for cattle and crops.  This follows a decrease in farm incomes of 8.4% in 2001.

OTHER NEWS

Information on Budget 2004 is available on this website.

Details of forthcoming statistical releases, including the IMF’s advance calendar can be found at: http://dsbb.imf.org/Applications/web/sddscountrycategorylist/?strcode=IRL

Queries and comments to:  Joe Kirwan or Colm O’Connor, Department of Finance, 73-79 Lower Mount Street, Dublin 2.

Phone (01) 6045771 or (01) 6045772, or e-mail: Joe.Kirwan@finance.gov.ie or Colm.O’Connor@finance.gov.ie