Sterling hits Irish industrial output

The drop in sterling value and the wider uncertainty since June’s Brexit vote is having a visibly negative effect on Ireland’s manufacturing sector, according to one leading economist.

“Uncertainty on Brexit, the depreciation of sterling against the euro and weaker global demand appear to be holding Irish manufacturers,” Davy Stockbrokers’ chief economist Conall Mac Coille noted yesterday.

However, Mr Mac Coille said the recovery in the domestic economy can keep Ireland’s GDP growth above or close to 3% this year and next.

He was reacting to latest CSO figures showing a provisional 8.2% monthly rise in manufacturing production in June, but a 0.4% year-on-year decline.

“The slowdown in Irish industrial production cannot be entirely dismissed as another statistical mirage,” he said. “Traditional sector output has contracted by 0.4% in the first half of 2016. This is a significant slowdown from the 4.4% expansion in 2015. The labour- intensive traditional sector accounts for two-thirds of employment in Irish industry.

“We knew goods exports — excluding pharmaceuticals — grew by just 2.1% in the first five months of 2015 following the 16% rise last year. Similarly, Ireland’s manufacturing PMI fell to just 50.2 in July, barely above the 50 no-change level.”

Davy suggests all that means manufacturing and exports will make a smaller contribution to GDP growth this year, placing the onus on the domestic recovery. However, it is upbeat regarding recent services and construction sector indices.

“Despite weaker trends in manufacturing, the rebound in domestic demand should ensure Ireland’s GDP growth remains above or close to 3% through 2016 and 2017,” said Mr Mac Coille.


Lifestyle

Leopard print midi dresses and sequins swirled beneath glossy goddess hair and golden headbands as the great and the good of Cork gathered for ieStyle Live.Leopard print and sequins to the fore at inaugural #IEStyleLive event

You have a long half-term break ahead of you all, and there’s only so much screen time anyone in the family can handle. Everyone is going to need a book-break at some point or another.We reviewed some of the best new books to keep kids entertained over half-term

Sexual politics, snideput-downs and family rivalries are fuelling the trouble brewing in a small Midlands town.Charlie Murphy and Pat Shortt star in new Irish film 'Dark lies the Island'

Robert Hume tells of the eccentric MP for Athboy, Co. Meath – born 300 years ago this month – who thought he was a teapot, and was afraid his spout might break off.A strange brew of a man: The MP for Meath who believed he was a teapot

More From The Irish Examiner