DECLINES in the hi-tech and chemical sectors dragged annualised production levels among Ireland’s manufacturing industries down in March, leading economists to downgrade full-year growth forecasts.
Latest figures from the Central Statistics Office (CSO) show production levels fell 1.3% on a rolling month-by-month basis and by 5.5% on an annualised basis.
The most significant drivers for the movement were an 8.7% production fall in basic pharmaceutical products and a 7.6% decline in beverages.
The CSO stated: “The ‘modern’ sector, comprising a number of high-technology and chemical sectors, showed an annual decrease in production for March of 7.4% and a decrease of 1.1% was recorded in the ‘traditional’ sector.”
The March figures compare poorly with February, when a 2.3% month-by-month decline in production was measured, but a 0.2% increase was evident on a year-on-year basis.
Following a good end to last year, economists had suggested the signs were good for the immediate future of Irish manufacturing output, but that has changed since the turn of the year.
Chief economist with Bloxham Stockbrokers Alan McQuaid said: “The latest figures are disappointing, especially looking at last year’s performance. Production in the first quarter of this year is down on a year-on-year basis and below 2010 overall; so much so that we’re now in negative territory.
“While a lot is down to multinational activity — those companies in the chemical, pharmaceutical and hi-tech sectors, the numbers also heavily reflect the drop in global demand and what’s happening in the wider world.”
This year’s downward momentum has led Bloxham to downgrade growth forecasts for Irish manufacturing output in 2011 from 5%-10% to 3%-5%.
Mr McQuaid added: “Recent US production numbers were also weak, but we’d expect to see some kind of pick-up as the year goes on; the ongoing general recovery in the world economy should generate momentum.”
The figures also show how the seasonally adjusted industrial turnover index for manufacturing industries was 2.1% lower in January to March compared to the preceding three-month period.
© Irish Examiner Ltd. All rights reserved