Industrial production growth slows in June

PRODUCTION growth was maintained across Ireland’s industrial sectors in June, but slowed when compared to a strong showing in May.

The latest available monthly industrial production and turnover data from the Central Statistics Office (CSO) details a 1.2% monthly increase in June in seasonally adjusted production volume.

While this was significantly slower than the 9.8% rise seen in May, it represents the second consecutive month of growth following the 10.6% drop seen in April.

On a year-on-year measure, June’s production volumes grew by 5.9%.

A rise of 1.6% in the ‘modern’ sector, made up of the high-tech and chemical/pharmaceutical areas, and a fall of 1.8% in the ‘traditional’ sector shaped month-by-month progress in June.

While the latest CSO figures show a 3.6% rolling quarter-by-quarter drop in production volumes for the second quarter of the year, the generally good performance from domestic manufacturers has pleased commentators.

“Production is notoriously volatile, thanks to the foreign-owned chemicals/pharma sector,” according to Rossa White, chief economist with Davy Stockbrokers. “To highlight that volatility, the modern sector saw output drop by 4.1% in the second quarter. That grouping had jumped by 22.2% in the first quarter. It’s not worth reading too much into quarterly swings for the multinational manufacturing sector, never mind monthly changes. Because Irish exports are import-intensive, and much of the value-add accrues to foreign owners of capital, the data is not a reliable guide to second quarter GNP. But the performance of the indigenous industry is encouraging,” he added.