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.

	GDP (%)	Value (€m)	GNP (%)	Value (€m)
1997	11.1	67,123	9.7	59,083
1998	8.6	77,543	7.9	68,161
1999	11.3	89,614	8.9	76,670
2000	10.1	102,845	10.2	88,095
2001	6.2	114,743	3.8	96,448
2002	6.9	129,344	0.1	103,430

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

According to the latest CSO data, which are preliminary, GDP growth in constant (1995) prices was 1.4% in 2003, while the corresponding figure for GNP was 3.3%.  These estimates incorporate year-on-year growth rates for Q4 2003 of 2.7% for GDP and 5.5% 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. 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 surplus of 0.2% of GDP, while a deficit of 1.1% is forecast for 2004.

General Government Receipts and Expenditure*

	2002	2003 (Provisional)	2004 (Projected)
	€m	€m	€m
GG Receipts	42,502	45,935	48,212
GG Expenditure	42,759	45,654	49,851
GG Balance	-258	280	-1640
- as a % of GDP	-0.2	0.2	-1.1
Financing of GG Balance
Currency and Deposits	-81
Securities other than Shares (excl. derivatives)	413
Short-term	-1,171
Long-term	1,583
Loans	-2
Short-term	-34
Long-term	32
Other Movements	-587
Total	-258	280	-1,640

* 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 32.8% and the forecast for end-2004 is 32.2%.

BALANCE OF PAYMENTS – CURRENT ACCOUNT

	Q1	Q2	Q3	Q4	Total
1998	-€173m	€271m	€512m	€20m	€627m
1999	€63m	-€6m	-€31m	€199m	€226m
2000	-€432m	€505m	-€238m	-€214m	-€379m
2001	-€508m	-€26m	€126m	-€349m	-€757m
2002	€45m	-€471m	-€310m	-€218m	-€954m
2003	-€1,039m	-€389	-€316m	-€903m	-€2,647m

There was a deficit of €903 million on the current account of the Balance of Payments in the fourth quarter of 2003.  This compares with a deficit of €218 million in Q4 2002.  The deficit in Q4 2003 was due to debit balances under the Services heading and the Income heading, which more than offset the credit balances under the Merchandise Trade and Current Transfers headings.  The current account deficit for the year 2003 was €2,647m compared to a deficit of €954m for 2001.

EMPLOYMENT

Labour Force Survey / Quarterly National Household Survey

The latest Quarterly National Household Survey (March 2004) indicates that in the twelve months to the quarter September to November 2003:

-     Employment increased by 44,600 or 2.5%;

-     Unemployment increased by 2,400, though the seasonally adjusted rate remained stable at 4.6% (4.5% non-seasonally adjusted);

-    The labour force increased by 47,100 or 2.4%;

-     The number of long term unemployed increased over the year by 1,100 – the long term unemployment rate stood at 1.4% in the fourth quarter of 2003;

-     The seasonally adjusted participation rate was 60.4% in Q4 2003, up from 59.9% in both Q3 2003 and Q4 2002 (i.e. quarter on quarter and year on year comparison).

 

Live Register

The Live Register figure for February 2004 was 173,127. This is a decrease of 1,402 on the figure for January 2004 and an increase of 1,733 on the figure for February 2003.  The underlying seasonally adjusted figure in February 2004 was 170,100, which represents a decrease of 900 on the figure for January 2004 and an increase of 1,700 on the seasonally adjusted figure for February 2003.

Building and Construction Employment

Figures in the QNHS indicate that employment in construction rose by 9,300 or 4.8% in the 12 months to the quarter September to November 2003. The CSO’s index of Employment in Construction release indicates that construction employment increased by 0.8% year on year to January 2004.

Other Production

The latest QNHS indicates that employment in production (other than construction) decreased by 7,600 or 2.5% in the twelve months to the quarter September to November 2003. The CSO release on Industrial Employment (March 2004) indicates that industrial employment decreased by 11,000 (4.3%) in the twelve months to December 2003.

Banking, insurance and building societies

Figures in the QNHS indicate that employment in “financial and other business services” increased by 6,400, or 2.8% in the 12 months to the quarter September to November 2003. The latest CSO release Banking, Insurance and Building Societies: Employment and Earnings indicates that employment in banking, insurance and building societies increased by 900 (1.8%) in the twelve months to September 2003.

Public sector employment

Figures released in the QNHS indicate that employment in public administration and defence increased by 2,300 or 2.6% in the 12 months to the quarter September to November 2003, and employment in education and health increased by 17,000 or 6.2% over the same period. 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 (1.2%) in the year to September 2003.

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 2,353 notified redundancies in February 2004, an increase of 13% on the corresponding figure for February 2003.

FÁS Training and Employment Programmes

At end February 2004, there were 25,397 people in FÁS Employment Schemes (incl. 19,509 on Community Employment). There were a further 10,531 on training programmes / schemes for the unemployed and jobseekers. The corresponding figures for those in FÁS Employment Schemes for February 2003 was 29,954 (incl. 23,953 on Community Employment) and 14,115 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 December 2003 increased by 6.9%, reflecting an increase of 5.3% in the hourly rate and an increase of 1.5% in the number of hours worked.  Average weekly industrial earnings in December 2003 were €558.69.

The corresponding average increases for the manufacturing sector were 6.1% (weekly), 4.8% (hourly) and a 1.3% increase in hours worked, with weekly earnings of €533.26.

The earnings of all employees in the industrial sector rose by 5.9% to €647.11 in the year to December 2003.  As well as the aforementioned 6.9% increase for Industrial workers, there was a 4.3% increase for Clerical & Managerial 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 February to 1.7%, compared to 1.8% in January.  This is its lowest level in more than four years.  Excluding mortgage interest rates, the underlying CPI was 2.0%.  The CPI excluding tobacco was 1.4%.  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 2.2% in February, down from 2.3% in January.  Euro area inflation in February was 1.6%, down from 1.9% in January. 

Manufacturing Output Prices

In February 2004, manufacturing output prices decreased by 6.6% y-o-y.  The prices for home sales fell by 0.9% y-o-y, while export sales prices dropped by 7.9% y-o-y.

Interest Rates

The EURIBOR one-month interbank rate on 31 March was 2.02%, down from 2.05% at the end of February, while the EURIBOR three-month interbank interest rate at 31 March was 1.96%, down from 2.05% at end of February. 

Ten-year Irish Government bonds (04/2013) traded at close of 31 March at a yield of 3.88% compared to 3.92% for the equivalent German Government bonds (01/2014). The European Central Bank’s Repo rate at end of March 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 January 2004, the volume of retail sales increased by 0.3% y-o-y; if Motor Trades are excluded the increase was 2.4%.  The volume increase in sales in 2003 as a whole was 0.8% while the corresponding increase excluding Motor Trades was 1.4%.  The volume increase in sales in 2002 was 0.1%, while sales excluding Motor Trades increased by 1.7%.  

 

Car Registrations

Data from the Revenue Commissioners indicates that new car registrations in February 2004 were up by 7.7% on the same month in 2003.  Meanwhile, registrations of imported used cars were 56% up y-o-y in February 2004.  Cumulative sales of new cars in January-February were up 3.1% year-on-year, while the increase for imported used cars was 42.8%.

OUTPUT AND EXPORTS

Manufacturing Output

Manufacturing output volume increased by 19.8% y-o-y in December 2003 and was 15.5% higher y-o-y for the 3-month period October-December 2003. The CSO provisionally estimates that output grew by 8.6% y-o-y in January 2004 and by 13.7% y-o-y for the 3-month period November 2003-January 2004.  According to CSO data, manufacturing output volume grew by 6.4% in 2003, following an 8.4% increase in 2002.

Exports

First estimates from the CSO indicate that the value of exports in the month of January 2004 fell by 3.4% y-o-y.  Detailed figures show that, for 2003 as a whole, in value terms, exports were down 12.2% y-o-y, including: organic chemicals down by 12%; medical and pharmaceutical products down by 15% and office machines etc. down by 15%.  Exports of food and live animals fell 1%.  In volume terms, it is estimated that overall exports fell by about 6% over the same period, with export prices having fallen by around 8%.  The CSO report that a very significant fall in the pattern of distributive type trade with Britain in electrical machinery and parts in 2002 affected year-on-year comparisons of both exports and imports in 2003.

TOURISM

According to CSO figures, there were 6,369,000 overseas visits to Ireland in 2003, an increase of 5% over 2002.  The number of visits abroad by Irish residents was 4,929,000 in 2003, an increase of 6.4% on 2002.  Earnings from overseas visitors to Ireland in 2003 amounted to €3,876 million, an increase of 2.9% over 2001.  Expenditure by Irish visitors abroad amounted to €4,163 million in 2003, an increase of 5.3% over 2002.

In the fourth quarter of 2003, there were 1,360,000 overseas visitors to Ireland, compared with 1,286,000 in the same period in 2002, an increase of 5.8%.  The number of visits abroad by Irish residents in Q4 2003 was 1,074,000, an increase of 9.5% when compared with the fourth 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

 

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