Manufacturing output up 0.2%
However, despite hinting at a strong recovery from a poor performance in the second half of 2012 — production levels are up by 5.6% since the turn of the year — the latest industrial production and turnover index from the CSO shows a good performance heavily influenced by multinationals and the tech/pharma-heavy so-called ‘modern’ sector.
That element of the economy showed a monthly production increase of 0.7% in February, according to yesterday’s CSO figures; while the domestic-related ‘traditional’ sector showed no monthly change.
“Traditional sector output has been closely correlated with the cycle in European industrial production. So, conditions are likely to remain weak as the European recession persists,” according to Conall MacCoille, chief economist with Davy Stockbrokers.
Mr MacCoille added that traditional sector production looks set to fall again for the first quarter, as a whole.
“The sector accounts for two-thirds of industrial employment, one of the worst-performing areas of the labour market in 2012.
“In all, industrial production has recovered 8.9% since the steep pharma-driven fall-off in September (when a 22.8% fall in ‘modern’ sector production pushed total industrial production down 14.3%).
“With data available for two-thirds of the first quarter, and bearing in mind the usual disclaimers that apply to industrial production data (ie the potential for volatility and revisions to prior data in March), it appears that first quarter 2013 is running around 3% ahead of fourth quarter 2012, driven primarily by the relative improvement in pharmaceutical volumes, which have recovered 31% since September,” said Philip O’Sullivan, chief economist with NCB Stockbrokers.
Meanwhile, the latest CSO release showed an increase of 3.1% in the seasonally-adjusted industrial turnover index in February, when compared to January.
On a year-on-year basis, turnover increased by 1.2%, it added.
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