ECONOMIC GROWTH (VOLUME)

According to Central Statistics Office data, the y-o-y increase in GDP at constant (1995) market prices in 2003 was 3.7% while the corresponding increase in GNP was 2.8%.  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)
1997-2003 (avg.)	7.6	-	5.8	-
1998	8.9	77,581	7.9	68,030
1999	11.1	89,457	8.7	76,359
2000	9.9	103,065	10.1	88,155
2001	6.0	115,433	3.8	97,107
2002	6.1	127,992	1.5	104,474
2003	3.7	134,786	2.8	111,671

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

Latest estimates of economic growth from the CSO relate to the second quarter of 2004.  These preliminary figures indicate that GDP increased by 4.1% year-on-year in Q2 2004, compared to the same period in 2003, while GNP increased by 4.2%.

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 €93 million. A deficit of €2,806 million was forecast on Budget Day last December for 2004.  This was revised to €1.8 billion in the Economic Review and Outlook, published in August. Taking into account once-off receipts from the Revenue Commissioners’ special investigations and other factors the Exchequer Balance is now forecast to be €1.2 billion at end 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 0.1% of GDP, while a small surplus is now forecast for 2004.

General Government Receipts and Expenditure (1) (2)

	2002	2003 (Provisional)	2004 (Projected)
	€m	€m	€m
GG Receipts	42,166	45,663
GG Expenditure	42,462	45,471
GG Balance	-296	192
- as a % of GDP	-0.2	0.1	0.0
Financing of GG Balance:
Currency and Deposits	-81	240
Securities other than Shares (excl. derivatives)	412	1642
Short-term	-1,172	-2,999
Long-term	1,584	4,641
Loans	42	-473
Short-term	-34	-158
Long-term	76	-315
Other Movements	-669	-1,217
Total	-296	192

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 32.7% at end-2002.  The outturn at end-2003 is estimated to be 32.1% and the forecast for end-2004 is 31.5%.

BALANCE OF PAYMENTS – CURRENT ACCOUNT

	Q1	Q2	Q3	Q4	Total
1999	€63m	-€6m	-€31m	€199m	€226m
2000	-€432m	€505m	-€238m	-€214m	-€379m
2001	-€508m	-€26m	€126m	-€349m	-€757m
2002	-€963m	-€1,135m	€95m	€386m	-€1,617m
2003	-€834m	-€413m	-€190m	-€459m	-€1,896m
2004	-€685m	-€110m

There was a deficit of €110 million on the current account of the Balance of Payments in the second quarter of 2004.  This compares with a deficit of €413 million in Q2 2003, and €685m in Q1 2004.  The improvement in Q2 relative to Q1 was driven by an increased surplus on merchandise trade and a decrease in deficit on services trade, offsetting a marginal increase in deficit on income – in addition current transfers moved from a small deficit in Q1 to a small surplus in Q2.  The current account deficit for the year 2003 was €1,896m compared to a deficit of €1,617m for 2002.

EMPLOYMENT

Labour Force Survey / Quarterly National Household Survey

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

-     Employment increased by 42,800 or 2.4%;

-     Unemployment increased by 2,100; the seasonally adjusted unemployment rate increased to 4.6% (4.4% non-seasonally adjusted);

-    The labour force increased by 44,800 or 2.4%;

-     The number of long term unemployed decreased over the year by 900 – the long term unemployment rate stood at 1.4% in the quarter March to May;

-     The seasonally adjusted participation rate was 60.6% in Q2 2004, unchanged from Q1 2004 and up from 60.2% in Q2 2003 (i.e. quarter on quarter and year on year comparison).

 

Live Register

The Live Register figure for September 2004 was 160,466.  This is a decrease of 15,350 on the figure for August 2004 and a decrease of 10,356 on the figure for September 2003.  The underlying seasonally adjusted figure in September 2004 was 163,700, which represents a decrease of 2,800 on the figure for August 2004.

Building and Construction Employment

Figures in the QNHS indicate that employment in construction rose by 14,600 or 7.6% in the 12 months to the quarter March to May 2004. The CSO’s index of Employment in Construction release indicates that construction employment increased by 5.1% year on year to August 2004.

Other Production

The latest QNHS indicates that employment in production (other than construction) decreased by 5,500 or 1.8% in the twelve months to the quarter March to May 2004. The CSO release on Industrial Employment (September 2004) indicates that industrial employment decreased by 6,300 (2.5%) in the twelve months to June 2004.

Banking, Insurance and Building Societies

Figures in the QNHS indicate that employment in “financial and other business services” increased by 9,900, or 4.4% in the 12 months to the quarter March to May 2004. The latest CSO release Banking, Insurance and Building Societies: Employment and Earnings indicates that employment in banking, insurance and building societies increased by 2,300 (4.5%) in the twelve months to March 2004.

Public Sector employment

Figures released in the QNHS indicate that employment in public administration and defence decreased by 2,900 or 3.1% in the 12 months to the quarter March to May 2004, and employment in education and health increased by 8,900 or 3.1% over the same period. The latest CSO Statistical Release on Public Sector Employment and Average Earnings indicates that 241,800 were employed in the public sector (excluding health), an increase of 2,200 (0.9%) in the year to March 2004.

Notified redundancies

The latest figures from the Department of Enterprise, Trade and Employment show that the number of notified redundancies in the first 10 months of 2004 was 20,127 – the comparable figure in Jan-Oct 2003 was 22,509. There were 1,994 notified redundancies in October 2004, a decrease of 15.5% on the corresponding figure for Oct 2003 (2,361).

FÁS Training and Employment Programmes

At end September 2004, there were 26,156 people in FÁS Employment Schemes (incl. 20,643 on Community Employment). There were a further 11,241 on training programmes/schemes for the unemployed and jobseekers. The corresponding figures for those in FÁS Employment Schemes for September 2003 was 26,394 (incl. 20,329 on Community Employment) and 10,492 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 June 2004 increased by 4.8%, reflecting an increase of 4.6% in the hourly rate and a increase of 0.1% in the number of hours worked, when compared to the same period in 2003.  Average weekly industrial earnings in June 2004 were €560.60.

The corresponding average increases for the manufacturing sector were 3.8% (weekly), 3.7% (hourly) and a 0.1% increase in hours worked, with weekly earnings of €531.91 

The earnings of all employees in the industrial sector rose by an average of 5% to €656.85 in the year to June 2004.  As well as the aforementioned 4.8% increase for Industrial workers, there were increases of 5.1% and 5.4% for Clerical & Managerial employees respectively.

Construction

According to the latest CSO release, average weekly earnings for all workers in the construction sector increased by an average 4.3% to €700.51 in the year to June 2004 - the hourly rate increased by 4.5% while the number of hours worked fell by 0.2%.  In the same period, average weekly earnings of skilled operatives increased by an average of 3.3% to €822.08, while for unskilled/semi-skilled workers there was an average increase of 4.6% to €682.85.

Banking, Insurance and 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 6.3% to €727.23 in the year to March 2004.

Public Sector

The latest CSO figures show that average weekly earnings in the public sector (excluding health) increased by 3.5% to €743.53 in the year to December 2003.

Distribution and Business Services

The latest CSO release indicates that average weekly earnings in the Distribution and Business Services sector increased by 4.6% to €608.69 in the year to March 2004.  Average weekly earnings in the Distribution sector increased by 3.5% to €612.81, while those in the Business Services sector increased by 5.1% over the same period to €606.35.

INFLATION AND INTEREST RATES

Inflation

The latest CSO figures show that the rate of inflation, as measured by the Consumer Price Index (CPI) fell to 2.5% in September, )from 2.6% in August. Excluding mortgage interest rates, the underlying CPI was 2.1%.  The CPI excluding tobacco was 2.4%.  In August this year, with the publication of the Economic Review and Outlook, the Department forecast an annual average CPI rate of inflation of 2.2% in 2004. 

As measured by the EU Harmonised Index of Consumer Prices (HICP), Ireland’s annual inflation rate fell to 2.4% in September compared to 2.5% in August. Euro area inflation in September measured 2.1 per cent, compared to 2.3% in August.

Manufacturing Output Prices

In September 2004, manufacturing output prices decreased by 0.8% y-o-y.  The prices for home sales increased by 0.8% y-o-y, while export sales prices fell by 1.0% y-o-y.

Interest Rates

The EURIBOR one-month interbank rate on 29 October 04 was 2.09%, up from 2.08% at the end of September, while the EURIBOR three-month interbank interest rate at 29 October 04 was 2.15%, unchanged from 2.15%  at end of September. 

Ten-year Irish Government bonds (04/2013) traded at the close of 29 October 04 at a yield of 3.75% compared to 3.85% for the equivalent German Government bonds (07/2014). The European Central Bank’s Repo rate at end of October was 2.00%.

House Prices

Department of the Environment, Heritage and Local Government figures show that the average price of new houses nationwide in 2003 rose by 13.4% to €224,567 while the average price of second-hand houses rose by 16.3% to €264,898. In Dublin, average new house prices rose by 13.9% to €291,646 while average second-hand house prices rose by 19.5% to €355,451.

In the first quarter of 2004, average new house prices nationwide rose by 11.3% y-o-y to €238,084 while average second-hand house prices rose by 12.6% to €274,274.  In the same period, average new house prices in Dublin increased by 11.8% y-o-y to €311,813 while average second-hand house prices in Dublin increased by 12.3% to €362,845.

PERSONAL CONSUMPTION

Retail Sales

Provisional figures for the month of August 2004 show that the volume of retail sales increased by 4.5% y-o-y; if Motor Trades are excluded the increase was 4.6%.  For the January-August 2004 period the y-o-y increase was 3.0% for All Businesses and 2.8% for All Businesses excluding Motor Trades.  The annual increase in Retail Sales volume in 2003 as a whole was 0.9% while the corresponding increase excluding Motor Trades was 1.6%.  The volume increase in sales in 2002 was 0.1%, while sales excluding Motor Trades increased by 1.6%. 

Car Registrations

Data from the Revenue Commissioners indicates that new car registrations in September 2004 were up by 2.2% on the same month in 2003.  Meanwhile, registrations of imported used cars were up 40% y-o-y in September 2004.  Cumulative registrations of new cars in January-September were up 7.0% year-on-year, while the increase for imported used cars was 54.6%. 

OUTPUT AND EXPORTS

Manufacturing Output

Manufacturing output volume increased by 7.0% y-o-y in July 2004, and was 3.8% higher in the year to July relative to the same period in 2003. According to CSO data, manufacturing output volume grew by 6.4% in 2003, following an 8.4% increase in 2002.

The CSO provisionally estimates that total industrial output (incorporating manufacturing output) decreased by 12.6% y-o-y in August 2004 and increased by 1.4% in the year to August, relative to Jan-Aug 2003. 

Exports

The volume of total exports, including both merchandise and services exports, increased by 5.7% in the first 6 months of 2004, relative to the same period in 2003.

Comparing the volume of merchandise exports in January-June 2004 with that in January-June 2003 reveals an increase of 8.5%.  First estimates from the CSO indicate that the value of merchandise exports in the month of August 2004 increased by 5.7% y-o-y. In January-August 2004 merchandise exports were 4.4% higher in value terms than in the corresponding period in 2003 and in the period January-July 2004:

·        Exports of Chemicals products increased by 7.7%

·        Exports of Computer equipment decreased by 10%

·        All other exports increased by 6.7%

·        Exports to the UK decreased by 3.0%

·        Exports to the US decreased by 0.7% 

·        Exports to the EU (excluding UK) increased by 9.2%

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 visitors to Ireland in 2003 amounted to €4,059 million, an increase of 1.8% over 2002.  Expenditure by Irish visitors abroad amounted to €4,145 million in 2003, an increase of 4.9% over 2002.

In the first half of 2004, there were 2,974,000 overseas visitors to Ireland, compared with 2,822,000 in the same period in 2003, an increase of 5.4%.  The number of visits abroad by Irish residents in the first half 2004 was 2,470,000, an increase of 9.2% when compared with the first half of 2003.

AGRICULTURE

Output

The CSO release Output, Input and Income in Agriculture 2003 - Final Estimate indicates that agricultural output at basic prices increased by 3.1% in 2003.  This follows a decrease of 3.8% in 2002.

Farm Incomes

The same CSO release shows that aggregate farm incomes (i.e. operating surplus) grew by 2.6% 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 6.8% in 2001.

OTHER NEWS

Information on Budget 2004 and the Economic Review and Outlook 2004 is available on the Department of Finance website.

www.finance.gov.ie

Copies of CSO releases can be downloaded from www.cso.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:  Scline Scott, Department of Finance, South Block, Government Buildings, Upper Merrion Street, Dublin 2.

Phone (01) 6045857 or e-mail:  scline.scott@finance.gov.ie

 

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