Total industrial output up 11%
The trend is maintained as the seasonally-adjusted volume of total industrial output for the period July to September 2010 was up 2.7%, compared with the preceding three-month period, and there was a slightly smaller rise of 2.3% in manufacturing over the same time span.
Bloxham chief economist Alan McQuaid said the bottom line is external demand will be key to how manufacturers perform in the coming months.
“Any weakening of the global economy will clearly have an adverse impact on output/exports. That said, Irish manufacturers are benefiting from improved competitiveness, with the lowering of the cost base arising from the decline in wages and prices across the economy expected to place Ireland in a very favourable position to benefit from the eventual recovery in trade flows.
“However, the expected rebound in output/exports may be held back somewhat by sector-specific effects. For instance, the chemicals sector, which accounts for around half of overall Irish merchandise exports, is expected to face somewhat limited upside potential amid the recovery in world trade in view of the slightly acyclical nature of demand for its output,” he added.
The “modern” sector, comprising a number of high-technology and chemical industries, showed a year-on-year rise in production for September of 13.5%, while the “traditional” sector posted an annual increase of 6.5%, the fifth consecutive monthly rise following two-and-a-half years of constant declines.
“Furthermore, the annual rate of increase in September was the highest so far in the recovery period. However, things may start to take a turn for the worse again in the short-term given the recent adverse euro exchange-rate movements versus the dollar and sterling.”
Mr McQuaid said things appear to be improving, with manufacturing output in the first three-quarters of 2010 up 6.4% on average on last year, while total production was 6.0% higher.
