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.

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 fell slightly by 0.1% year-on-year in the third quarter of 2003.  GNP was estimated to have grown by 3.6% year-on-year in the same period.  In the first three-quarters of 2003 GDP grew by 1.1% and GNP by 2.8% in comparison with the same period in 2002.

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. A deficit of €2,806 million is forecast for 2004.

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 estimated outturn for the GGB is a deficit of 0.1% of GDP, while a deficit of 1.1% is forecast for 2004. These figures will be updated in the next MEB in light of the March Maastricht return which is due to be available shortly.

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 32.3% at end-2002.  The outturn at end-2003 is estimated to be 32.0% and the forecast for end-2004 is 32.2%.

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

The latest Quarterly National Household Survey (December 2003) indicates that in the twelve months to the quarter June to August 2003:

-     Employment increased by 26,000 or 1.4%;

-     Unemployment rose by 12,200 to a seasonally adjusted rate of 4.9% (5.2% non-seasonally adjusted);

-    The labour force increased by 38,200 or 2%;

-     The long term unemployment rate remained at 1.4% in the quarter (i.e. no change from Q2 2003), compared to 1.2% in June to August 2002.

Live Register

The Live Register figure for January 2004 was 174,529. This is an increase of 3,925 on the figure for December 2003 and an increase of 3,828 on the figure for January 2003.  The underlying seasonally adjusted figure in January 2004 was 171,000, which represents an increase of 1,200 on the figure for December 2003 and an increase of 3,900 on the seasonally adjusted figure for January 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 December 2003.

Other Production

The latest QNHS indicates that employment in production (other than construction) decreased by 9,600 or 3.0% in the twelve months to the quarter June to August 2003. The CSO release on Industrial Employment (Preliminary Estimates - December 2003) indicates that industrial employment decreased by 14,800 (5.7%) in the twelve months to September 2003.

Banking, insurance and building societies

The latest CSO release 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 September 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

The latest CSO Statistical Release on Public Sector Employment and Average Earnings indicates that 235,700 were employed in the public sector (excluding health), an increase of 2,700 in the year to September 2003. Figures released in the QNHS indicate that employment in public administration and defence increased by 2,400 or 2.7% in the 12 months to the quarter June to August 2003, and employment in education and health increased by 17,900 or 6.8% over the same period.

Notified redundancies

The latest figures from the Department of Enterprise, Trade and Employment show that the number of notified redundancies in 2003 was 27,702, an increase of 9.2% on the figure of 25,358 for 2002. There were 2,288 notified redundancies in January 2004, an increase of 5% on the corresponding figure for January 2003.

FÁS Training and Employment Programmes

At end January 2004, there were 25,502 people in FÁS Employment Schemes (incl. 19,682 on Community Employment). There were a further 10,446 on training programmes / schemes for the unemployed and jobseekers. The corresponding figures for those in FÁS Employment Schemes for January 2003 was 30,063 (incl. 24,129 on Community Employment) and 14,239 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 increased by 3.9% to €689.92 in the year to September 2003.

Public Sector

The latest CSO figures show that average weekly earnings in the public sector (excluding health) increased by 4.9% to €735.50 in the year to September 2003.

Distribution and Business Services

The latest CSO release indicates that average weekly earnings in the Distribution and Business Services sector increased by 4.7% to €587.49 in the year to September 2003.  Average weekly earnings in the Distribution sector increased by 6.4% to €603.24 while those in the Business Services sector increased by 3.8% over the same period to €578.03.

INFLATION AND INTEREST RATES

Inflation

The latest CSO figures show that the rate of inflation, as measured by the Consumer Price Index (CPI) fell further in January to 1.8%, compared to 1.9% in December 2003. This is its lowest level in more than four years.  Excluding mortgage interest rates, the underlying CPI was 2.1%.  The CPI excluding tobacco was 1.5%.  The Department forecasts an annual average CPI rate of inflation of 2.5% in 2004.

As measured by the EU Harmonised Index of Consumer Prices (HICP), Ireland’s annual inflation rate was 2.3% in January, down from 2.9% in December. Euro area inflation in January was 1.9 %, down from 2.0% in December. 

Manufacturing Output Prices

In January 2004, manufacturing output prices decreased by 8.2% y-o-y.  The prices for home sales fell by 0.6% y-o-y, while export sales prices dropped by 9.7% y-o-y.

Interest Rates

The EURIBOR one-month interbank rate on 27 February was 2.05%, down from 2.07% at the end of January, while the EURIBOR three-month interbank interest rate at 27 February was 2.05%, down from 2.09% at end of January. 

Ten-year Irish Government bonds (04/2013) traded at close of 27 February at a yield of 4.00% compared to 4.04% for the equivalent German Government bonds (01/2014). The European Central Bank’s Repo rate at end of February 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 third quarter of 2003, average new house prices nationwide rose by 13.1% y-o-y to €225,356 while average second-hand house prices rose by 16.1% to €266,444.  In the same period, average new house prices in Dublin increased by 10.7% y-o-y to €295,158 while average second-hand house prices in Dublin increased by 16.6% to €350,599.

 PERSONAL CONSUMPTION

Retail Sales

In the month of December 2003, the volume of sales decreased by 0.1% y-o-y, while sales excluding Motor Trades increased by 0.6%.  The volume increase in sales in 2003 as a whole over 2002 was 0.8% while the corresponding increase excluding Motor Trades was 1.4%.  The volume increase in sales in 2002 was 0.1% compared to an increase of 1.8% in 2001.  The corresponding increase excluding Motor Trades in 2002 was 1.7% compared to an increase of 7.1% in 2001.

Car Registrations

Data from the Revenue Commissioners indicates that new car registrations in January 2004 were slightly up (0.3%) on the same month in 2003.  Meanwhile, registrations of imported used cars were 30.1% up y-o-y in January 2004.

OUTPUT AND EXPORTS

Manufacturing Output

Manufacturing output volume increased by 13.4% y-o-y in November 2003, and was 8.1% higher y-o-y for the 3-month period September-November 2003. The CSO provisionally estimates that output grew by 20.7% y-o-y in December 2003 and by 6.7% for 2003 as a whole.  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 December 2003 fell by 0.4% y-o-y.  Detailed figures show that, for the period January-November 2003, in value terms, exports were down 13.2% y-o-y, including: organic chemicals down by 13%; medical and pharmaceutical products down by 13% and office machines etc. down by 16%.  Exports of food and live animals fell 2%.  In volume terms, it is estimated that overall exports fell by 7.2% 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 Preliminary Estimate indicates that agricultural output at basic prices increased by 3.1% in 2003.  This follows a decrease of 3.6% in 2002.

Farm Incomes

The same CSO release shows that aggregate farm incomes grew by 4.9% 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 the Department of Finance website.

www.finance.gov.ie

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