Industrial output growth slows

PRODUCTION across Irish manufacturing fell 0.2% in the last quarter of 2004, compared with the previous three months.

The figures are consistent with a market fall off in chemical output and other key sectors that have driven the economy during the boom years.

Overall the total volume of industrial output for the three months was up by 0.5% on the previous quarter.

Analysts say that the boom in manufacturing looks to be over and demand in the economy will be driven by services and the consumer.

Total industrial output in December was 0.5% higher than in December 2003, while the increase for manufacturing was 0.3%.

The modern sector, comprising a number of high-technology and chemical sectors, showed a year-on-year decrease in production for December of 0.4%, while an annual increase of 2.6% was recorded in the traditional sector.

For 2004 as a whole, total industrial output was only 1.1% higher on average than in 2003, while the average rise for manufacturing was just 0.8%.

Within this, the modern sector posted an average annual decline of 0.1% while the traditional sector saw an increase of 3.7%.

According to Bloxham Stockbrokers economist Alan McQuaid the figures in the latest quarterly National Accounts point to a more favourable position than the industrial production data cited above.

Over the first three quarters of 2004, output growth in the industrial sector, excluding construction, increased by an average of just under 5% compared with the same period the previous year, he said.

Looking ahead to future trends, the most recent PMI and IBEC/ESRI monthly surveys for manufacturing point to better times.

However they do point to growth rates likely to remain in low single digits.

They are also more consistent with a growth rate of 5%, forecast for the economy for 2005, which most economists think is achievable despite concerns over the performance for the rest of the eurozone economies.

Improved global demand this year should lead to increased industrial output.