CSO data is a mixed bag

Production levels within the manufacturing sector fell by 1% on a monthly basis in August, and by nearly 7% when measured on a year-on-year basis.

Latest industrial production and turnover data, published yesterday by the CSO, provide a mixed bag of information. While the latest PMI from Investec Ireland last week showed continued momentum in the manufacturing sector last month (September seeing the fastest pace of monthly expansion for over a year), the more historical CSO figures show that the after-effects of the patent cliff are still being felt.

Some commentators expressed surprise at yesterday’s August data — Merrion Stockbrokers had been looking for a 4% annualised production rise. Its chief economist, Alan McQuaid, still foresees a low single-digit decline for the year as a whole.

The August data showed a 0.4% monthly rise in production, but an 11.4% yearly decline for the tech and pharma-heavy ‘modern’ sector. The more domestically-minded ‘traditional’ sector (food/beverages etc) showed a monthly rise of 0.9% and an annualised increase of 4.3%.

Emmet Gaffney of Investec Ireland noted the lingering effect of the revenue drop for pharmaceutical firms, but said the slowly improving traditional sector — which represents less revenue but more employment — was a basis for positivity.

The volatility in the latest CSO figures, according to David McNamara of Davy Stockbrokers, “masks” the encouraging trends in the more labour-intensive traditional sector. In production terms, that sector is up 3.4%, year-on-year, in the three months to the end of August; the fastest surge for two years.

Meanwhile, separate CSO data yesterday showed an increase of over €30bn in inward foreign corporate investment in Ireland last year, more than double the inflow from the previous year.

The overall stock of foreign investment in Ireland stood at €258bn; up from €225bn in 2011.