ECONOMIC GROWTH (VOLUME)

According to Central Statistics Office data, the y-o-y increase in GDP at constant (1995) market prices in 2002 was 6.9% while the corresponding increase in GNP was 0.1%.

These figures represent the average of the expenditure and output estimate of GDP and GNP respectively.

The CSO has published estimates of GDP and GNP for the first quarter of 2003. According to these figures, which are preliminary, there was a y-o-y increase of  0.5% in GDP at constant market prices in Q1 2003.  GNP at constant market prices grew by 0.8% in the same period.

BALANCE OF PAYMENTS – CURRENT ACCOUNT

There was a deficit of €1,039 million on the current account of the Balance of Payments in the first Quarter of 2003.  This compares with a surplus of €45 million in Q1 2002.  The deficit in Q1 2003 was due to debit balances under the Services heading, the Income heading and the Current Transfers heading, which more than offset the credit balance under the Merchandise Trade heading.  The current account deficit for the year 2002 was €954m compared to a deficit of €757m for 2001.

Exchequer Balance

The 2002 Exchequer Surplus was €95 million, which compares with the 2002 Budget target of €170 million. The Exchequer Surplus in 2001 was €653 million.

General Government Balance

The estimated outturn for the General Government Balance (GGB) in 2002 is a deficit of 0.2% of GDP on an ESA 95 basis.  The 2003 estimate for the GGB is a deficit of 0.9% of GDP. 

General Government Receipts and Expenditure 

An advance release calendar for central and general government - one quarter in advance - is available on the IMF Dissemination Standard Bulletin Board (details below).

General Government Debt

Ireland’s General Government Debt to GDP ratio was 36.1% at end-2001.  The outturn at end-2002 was 32.4% and the forecast for end-2003 is 33.6%. 

EMPLOYMENT

Labour Force Survey / Quarterly National Household Survey

The latest Quarterly National Household Survey indicates that in the twelve months to the quarter March to May 2003:

-     Employment increased by 28,400 or 1.6%;

-     Unemployment rose by 4,200 to a rate of 4.4%;

-    The labour force increased by 32,700 or 1.8%;

-     The long term unemployment rate increased to 1.4% compared to 1.2% in March to May 2002.

Live Register

The Live Register figure for July 2003 was 185,447.  This is an increase of 7,585 on the figure for June 2003 and an increase of 13,349 on the figure for July 2002.  The underlying seasonally adjusted figure in July 2003 was 178,500, which represents an increase of 13,400 on the figure for July 2002 and an increase of 2,300 on the seasonally adjusted figure for June 2003. 

Building and Construction Employment

Figures in the QNHS indicate that employment in construction rose by 9,300 or 5.1% in the 12 months to the quarter March to May 2003.  The CSO’s index of “Employment in Construction” release indicates that industrial employment increased by 0.6% year on year to June 2003. 

Other Production

The latest QNHS indicates that employment in production (other than construction) decreased by 800 or 0.3% in the twelve months to the quarter March to May 2003. The CSO release on Industrial Employment (Preliminary Estimates) indicates that industrial employment decreased by 14,100 in the twelve months to March 2003. 

Banking, insurance and building societies

The latest CSO release Banking, Insurance and Building Societies: Employment and Earnings indicates that employment in banking, insurance and building societies decreased by 1,100 to 50,100 in the twelve months to December 2002. Figures in the QNHS indicate that employment in “financial and other business services” decreased by 2,200 or 1.0% in the 12 months to the quarter March - May 2003.  

Public sector employment

The latest CSO Statistical Release on Public Sector Employment and Average Earnings indicates that 239,400 were employed in the public sector (excluding health), an increase of 6,500 in the year to March 2003. Figures released in the QNHS indicate that employment in public administration and defence increased by 1,500 or 1.7% in the 12 months to the quarter March-May 2003, and employment in education and health increased by 15,700 or 5.9% over the same period. 

Notified redundancies

The latest figures from the Department of Enterprise, Trade and Employment show that the number of notified redundancies in 2002 was 25,358, an increase of 26.9% on the figure of 19,977 for 2001.  For the first 8 months of 2003 (Jan-Aug) the notified redundancies figure stands at 17,590, a decrease of 0.5% on 17,680 for the corresponding period in 2002.  There were 2,138 notified redundancies in August 2003, an increase of 40.7% on the corresponding figure of 1,520 in August 2002.  

FÁS Training and Employment Programmes

At end July 2003, there were 27,685 people in FÁS Employment Schemes (incl. 21,611 on Community Employment). There were a further 11,554 on training programmes / schemes for the unemployed and jobseekers. The corresponding figures for those in FÁS Employment Schemes for July 2002 was 32,499 (incl. 27,420 on Community Employment) and 12,334 were attending the various other training programmes / schemes.   

EARNINGS

Industrial Earnings

The latest CSO release shows that average weekly industrial earnings in the year to March 2003 increased by 7.5%, reflecting an increase of 7.2% in the hourly rate and an increase of 0.3% in the number of hours worked.  Average weekly industrial earnings in March 2003 were €517.15. 

The corresponding average increases for the manufacturing sector were 7.1% (weekly), 6.7% (hourly) and a 0.3% increase in hours worked, with weekly earnings of €498.80. 

The earnings of all employees in the industrial sector rose by 7.1% to €612.02 in the year to March 2003.  This rise consisted of increases of 7.5% for Industrial Employees and 6.5% for Clerical and Managerial Employees combined. 

Construction Sector

According to the latest CSO release, average weekly earnings for all workers in the Construction sector increased by 4.4% to €651.46 in the year to March 2003 - the hourly rate increased by 5.5% while the number of hours worked fell by 1.1%.  Average weekly earnings of skilled operatives increased by 5.5% to €764.98, while for unskilled/semi-skilled workers the increase was 0.6% in the same period to €628.37. 

Banking, Insurance & Building Societies Sector

The CSO Statistical Release, Banking, Insurance and Building Societies: Employment and Earnings, indicates that average weekly earnings in the financial sector rose by 2.1% to €679.78 in the year to December 2002, comprising increases of 1.0% in Banking & Building Societies to €669.49 and 4.5% for the Insurance sector to €703.93. 

Public Sector

The latest CSO figures show that average weekly earnings in the Public Sector (excluding health) increased by 3.1% to €717.65 in the year to March 2003. 

Distribution and Business Services

The latest CSO release indicates that average weekly earnings in the Distribution and Business Services sector increased by 4.9% to €578.33 in the year to March 2003.  Average weekly earnings in the Distribution sector increased by 6.8% to €588.02 while those in the Business Services sector increased by 3.9% over the same period to €573.01.

INFLATION AND INTEREST RATES

Inflation

The latest CSO figures show that the rate of inflation, as measured by the Consumer Price Index (CPImoderated further in July to 3.1%, compared to 3.5% in June  Excluding mortgage interest rates, the underlying CPI was 4.1%.  The CPI excluding tobacco was 2.8%. As published in the Economic Review and Outlook recently, inflation is now forecast to average 3.6% this year, revised down from our Budget Day forecast of 4.8%. 

As measured by the EU Harmonised Index of Consumer Prices (HICP), Ireland’s annual inflation rate was 3.9% in July, up slightly from 3.8% in June  Euro area inflation in June was 1.9 %, compared to 2.0% in June.

Manufacturing Output Prices

In July 2003, manufacturing output prices decreased by 8.2% y-o-y.  The prices for home sales rose by 0.1% y-o-y, while export sales prices dropped by 10.0% y-o-y.

Interest Rates

The EURIBOR one-month interbank rate on 29 August was 2.13%, up from 2.11% at the end of July, while the EURIBOR three-month interbank interest rate at 29 August was 2.15%, up from 2.12% at end of July.  Ten-year Irish Government bonds traded at close on 29 August at a yield of 4.198% compared to 4.190% for the equivalent German Government bonds.  The European Central Bank’s Repo rate at end of August was 2.00%.

House Prices

Department of the Environment and Local Government figures show that the average price of new houses in 2002 rose by 8.3% to €198,087 while the average price of second-hand houses rose by 10.5% to €227,799. In Dublin, average new house prices rose by 5.4% to €256,109 while average second-hand house prices rose by 11% to €297,424. 

In the first quarter 2003, average new house prices rose by 12.6% y-o-y to €213,904 while average second-hand house prices rose by 14.2% to €243,604. In the same period, average new house prices in Dublin increased by 16.0% y-o-y to €278,819 while average second-hand house prices in Dublin increased by 17.6% to €323,087.

PERSONAL CONSUMPTION

Retail Sales

In the month of June 2003, the volume of sales increased by 2.9% y-o-y, with sales excluding Motor Trades recording a rise of 2.6%.  The volume increase in sales in the January - June period over the same period in 2002 was 1.4% while the corresponding figure excluding Motor Trades was 2.0%.  The volume increase in sales in 2002 was 0.7% compared to an increase of 3.1% in 2001.  The corresponding increase excluding Motor Trades in 2002 was 2.2% compared to an increase of 7.5% in 2001.

Car Registrations

Data from the Revenue Commissioners indicates that new car registrations in July 2003 were up 6.4% on July 2002 while sales of imported used cars in July 2003 were 12.4% higher y-o-y.  Cumulative sales of new cars for the period January – July 2003 showed a y-o-y decrease of 5.4% while cumulative sales of imported used cars fell by 0.3%.

OUTPUT AND EXPORTS

Manufacturing Output

Manufacturing output increased by 0.4% y-o-y in May 2003. The CSO provisionally estimates that output decreased by 0.2%% y-o-y in June.  According to CSO data, manufacturing output volume for 2002 was 8.4% higher than in 2001.  This follows an increase of 10.2% for 2001.  

Exports

First estimates indicate that the value of exports in the month of June decreased by 8.7% y-o-y.  Detailed figures show that, for the period January-May 2003, in value terms, exports of organic chemicals fell by 24.7%; medical and pharmaceutical products decreased by 6.9%; office machines etc. fell by 19.1% and electrical machinery etc. recorded a 70% decrease.  Exports of food and live animals fell 4.2%.

TOURISM

According to CSO figures, there were 6,065,000 overseas visitors to Ireland in 2002, an increase of 1.3% over 2001.  The number of visits abroad by Irish residents was 4,634,000 in 2002, compared with 4,216,000 in 2001, an increase of 9.9%.  Earnings from overseas visitors to Ireland in 2002 amounted to €3,764 million, an increase of 1.7% over 2001.  Expenditure by Irish visitors abroad amounted to €3,956 million in 2002, an increase of 23.2% over 2001. 

In the first quarter of 2003, there were 1,118,000 overseas visitors to Ireland, compared with 1,121,000 in the same period last year, a decrease of 0.3%.  The number of visits abroad by Irish residents in Q1 2003 was 939,000, an increase of 5.4% when compared with the first quarter of 2002. 

AGRICULTURE

Output

The CSO release Output, Input and Income in Agriculture 2002 indicates that agricultural output at basic prices decreased by 3.6% in 2002.  This follows an increase of 1.1% in 2001.

Farm Incomes

The same CSO release shows that aggregate farm incomes fell by 8.1% in 2002 as a result of a decrease in the output value of pigs, sheep, cattle, poultry, milk, and crops. This follows an increase in farm incomes of 6.4% in 2001.

OTHER NEWS

Information on Budget 2003 is available on the Department of Finance website.

Details of forthcoming statistical releases, including the IMF’s advance calendar can be found at:

Queries and comments to:  Joe Kirwan or Colm O’Connor, Department of Finance, 73-79 Lower Mount Street, Dublin 2.

Phone (01) 6045771 or (01) 6045772, or e-mail: Joe.Kirwan@finance.gov.ie or Colm.O’Connor@finance.gov.ie