ECONOMIC GROWTH (VOLUME)

According to Central Statistics Office data, the y-o-y increase in GDP in 2003, at constant (1995) market prices in 2003 was 3.7% while the corresponding increase in GNP was 2.8%.  The following table shows growth in GDP and GNP in constant (1995) prices and the corresponding annual values in current market prices.

	GDP (%)	Value (€m)	GNP (%)	Value (€m)
1997-2003 (avg.)	7.6	-	5.8	-
1998	8.9	77,581	7.9	68,030
1999	11.1	89,457	8.7	76,359
2000	9.9	103,065	10.1	88,155
2001	6.0	115,433	3.8	97,107
2002	6.1	127,992	1.5	104,474
2003	3.7	134,786	2.8	111,671

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

(Source: CSO, Quarterly National Accounts. Released 22 December 2004. Next release for Q4 2004 due not later than 31 March 2005).

Latest estimates of economic growth from the CSO relate to the third quarter of 2004.  These preliminary figures indicate that GDP increased by 5.8% year-on-year in Q3 2004, compared to the same period in 2003, while GNP increased by 4.2%.

The Department published forecasts for economic growth in the Budget on December 1^st. In 2004 GDP growth of 5.3% is expected, along with GNP growth of 4.9%. The forecast for 2005 is for GDP growth of 5.1% and GNP growth of 4.7%.

BUDGET INDICATORS

Exchequer Balance

The 2004 Exchequer Balance showed a surplus of €33 million, which compares with the Budget 2004 forecast of a deficit of €2,806 million and a Budget 2005 estimate of a deficit of €202 million. The improvement in the Exchequer Balance compared to the Budget 2004 forecast was largely due to additional tax receipts in excess of expectations and savings in capital and current spending.

General Government Balance

The estimated General Government Balance for 2004 is a surplus of 0.9 per cent of GDP, as indicated on 1 December.

General Government Receipts and Expenditure (1)

	2002	2003 (Provisional)	2004 (Projected)(2)
	€m	€m	€m
GG Receipts	42,166	45,663
GG Expenditure	42,462	45,471
GG Balance	-296	192
- as a % of GDP	-0.2	0.1	0.9
Financing of GG Balance:
Currency and Deposits	-81	240
Securities other than Shares (excl. derivatives)	412	1642
Short-term	-1,172	-2,999
Long-term	1,584	4,641
Loans	42	-473
Short-term	-34	-158
Long-term	76	-315
Other Movements	-669	-1217
Total	-296	192

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 32.7% at end-2002.  The outturn at end-2003 is estimated to be 32.1% and the forecast for end-2004 is 30.5%.

BALANCE OF PAYMENTS – CURRENT ACCOUNT

	Q1	Q2	Q3	Q4	Total
1999	€63m	-€6m	-€31m	€199m	€226m
2000	-€432m	€505m	-€238m	-€214m	-€379m
2001	-€508m	-€26m	€126m	-€349m	-€757m
2002	-€963m	-€1,135m	€95m	€386m	-€1,617m
2003	-€834m	-€413m	-€190m	-€459m	-€1,896m
2004	-€685m	-€110m	-€91m

(Source: CSO, Balance of International Payments. Released 22 December 2004. Next release for Q4 2004 due not later than 31 March 2005).

There was a deficit of €91 million on the current account of the Balance of Payments in the third quarter of 2004.  This compares with a deficit of €190 million in Q3 2003, and €110m in Q2 2004.  The improvement in Q2 relative to Q1 was driven by an increased surplus on merchandise trade and a decrease in deficit on services trade, offsetting a marginal increase in deficit on income – Q3 saw a continuation of this trend with improved performance from services exports resulting in a narrowing of the deficit.  The current account deficit for the year 2003 was €1,896m compared to a deficit of €1,617m for 2002.

EMPLOYMENT

Labour Force Survey / Quarterly National Household Survey

The latest Quarterly National Household Survey (QNHS) of December 2004 indicates that in the twelve months to the quarter June to August 2004:

-     Employment increased by 57,200 or 3.1%;

-     Unemployment decreased by 4,900; the seasonally adjusted unemployment rate for Q3 fell to  4.4% from 4.6% in Q2;

-    The labour force increased by 52,200 or 2.6%;

-     The number of long term unemployed in Q3 2004 increased over the year by 1,000 – the long term unemployment rate stood at 1.4% unchanged from Q2 2004;

-     The participation rate was 61.8% in Q3 2004, from 60.0% in Q2 2004 and down slightly from 61.3% in Q3 2003.

The next QNHS results are due to be published not later than 28^th February 2005.

Live Register

The Live Register figure for November 2004 was 151,966.  This is a decrease of 3,510 on the figure for October 2004 and a decrease of 12,575 on the figure for November 2003.  The underlying seasonally adjusted figure in November 2004 was 158,600, which represents a decrease of 3,500 on the figure for October 2004.

Building and Construction Employment

Figures in the QNHS indicate that employment in construction rose by 21,600 in the 12 months to the quarter June to August 2004. The CSO’s index of Employment in Construction release indicates that construction employment increased by 5.5% year on year to October 2004.

Other Production

The latest QNHS indicates that employment in production (other than construction) decreased by 2,100, or 0.68% in the twelve months to the quarter June to August 2004. The CSO release of September 2004 on Industrial Employment indicates that industrial employment decreased by 6,300 (2.5%) in the twelve months to June 2004.

Banking, Insurance and Building Societies

Figures in the QNHS indicate that employment in “financial and other business services” increased by 12,500, or 5.4%, in the 12 months to the quarter June to August 2004. The latest CSO release of 10^th November 2004 Banking, Insurance and Building Societies: Employment and Earnings indicates that employment in banking, insurance and building societies increased by 1,600 (3.1%) in the twelve months to June 2004.

Public Sector employment

Figures released in the QNHS indicate that employment in public administration and defence decreased by 300 or 0.3% in the 12 months to the quarter June to August 2004, and employment in education and health increased by 10,500 or 3.7% over the same period. The latest CSO Statistical Release of 26^th November 2004 on Public Sector Employment and Average Earnings indicates that 243,700 were employed in the public sector (excluding health), an increase of 2,800 (1.2%) in the year to June 2004.

Notified redundancies

The latest figures from the Department of Enterprise, Trade and Employment show that the number of notified redundancies in the 12 months of 2004 was 23,372 – the comparable figure in Jan-Dec 2003 was 27,702. There were 1,293 notified redundancies in December 2004, a decrease of 54.8% on the corresponding figure for December 2003 (2,862).

FÁS Training and Employment Programmes

At end September 2004, there were 26,156 people in FÁS Employment Schemes (incl. 20,643 on Community Employment). There were a further 11,241 on training programmes/schemes for the unemployed and jobseekers. The corresponding figures for those in FÁS Employment Schemes for September 2003 was 26,394 (incl. 20,329 on Community Employment) and 10,492 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 September 2004 increased by 4.5%, reflecting an increase of 4.9% in the hourly rate and a decrease of 0.2% in the number of hours worked, when compared to the same period in 2003.  Average weekly industrial earnings in September 2004 were €561.41.

The corresponding average increases for the manufacturing sector were 4.5% (weekly), 4.9% (hourly) and a 0.5 % decrease in hours worked, with weekly earnings of €535.26. 

The earnings of all employees in the industrial sector rose by an average of 4.9% to €657.56 in the year to September 2004.  As well as the aforementioned 4.5% increase for Industrial workers, there were increases of 3.9% and 5.1 % for Clerical & Managerial employees respectively.

Source: CSO, Industrial Earnings and Hours Worked. Released 23 December 2004. Next release for Q4 2004 due not later than 31 March 2005.

Construction

According to the latest CSO release, average weekly earnings for all workers in the construction sector increased by an average 6.8% to €718.31 in the year to September 2004 - the hourly rate increased by 6.0% while the number of hours worked fell by 0.9%.  In the same period, average weekly earnings of skilled operatives increased by an average of 9.0% to €850.37, while for unskilled/semi-skilled workers there was an average increase of 4.5% to €689.13. (Source: CSO, Earnings and Hours Worked in Construction. Released 17 December 2004. Next release for Q4 2004 due not later than 31 March 2005).

Banking, Insurance and Building Societies

The CSO Statistical Release, Banking, Insurance and Building Societies: Employment and Earnings, indicates that average weekly earnings in the banking, insurance and building societies sector increased by 4.0% to €736.26 in the year to June 2004. (Source: CSO, Banking, Insurance and Building Societies: Employment and Earnings. Released 10 November 2004. Next release for Q3 2004 due not later than 31 January 2005).

Public Sector

The latest CSO figures show that average weekly earnings in the public sector (excluding health) increased by 8.2% to €790.38 in the year to June 2004. (Source: CSO, Public Sector employment and Public Sector Average Earnings. Released 26 November 2004. Next release for Q3 2004 due not later than 28 February 2005).

Distribution and Business Services

The latest CSO release indicates that average weekly earnings in the Distribution and Business Services sector increased by 5.7% to €616.92 in the year to June 2004.  Average weekly earnings in the Distribution sector increased by 3.6% to €614.55, while those in the Business Services sector increased by 6.9% over the same period to €618.24. (Source: CSO, Earnings in Distribution and Business Services. Released 22 October 2004. Next release for Q3 2004 due not later than 28 January 2005).

INFLATION AND INTEREST RATES

Inflation

The latest CSO figures, which were published on December 9^th, show that the rate of inflation, as measured by the Consumer Price Index (CPI) increased to 2.9% in November, from 2.7% in October. Excluding mortgage interest rates, the underlying CPI was 2.5%. The CPI excluding tobacco was 2.8%. The CSO will release figures for December not later than January 20^th.  In December this year, with the publication of Budget 2005, the Department forecast an annual average CPI rate of inflation of 2.2% in 2004. 

As measured by the EU Harmonised Index of Consumer Prices (HICP), Ireland’s annual inflation rate increased to 2.8% in November, compared to 2.5% in October. Euro area inflation in November measured 2.2%, compared to 2.4% in October.

Manufacturing Output Prices

In November 2004, manufacturing output prices decreased by 1.6% y-o-y. The prices for home sales increased by 0.9% y-o-y, while export sales prices fell by 2.1% y-o-y.

Interest Rates

The EURIBOR one-month interbank rate on 31 December 04 was 2.13%, down from 2.17% at the end of November, while the EURIBOR three-month interbank interest rate at 31 December 04 was 2.16%, down from 2.18% at end of November. 

Ten-year Irish Government bonds (04/2013) traded at the close of 31 December 04 at a yield of 3.48% compared to 3.68% for the equivalent German Government bonds (01/2015). The European Central Bank’s Repo rate at end of December was 2.00%.

House Prices

Department of the Environment, Heritage and Local Government figures show that the average price of new houses nationwide in 2003 rose by 13.4% to €224,567 while the average price of second-hand houses rose by 16.3% to €264,898. In Dublin, average new house prices rose by 13.9% to €291,646 while average second-hand house prices rose by 19.5% to €355,451.

In the latest Department of Environment Housing Statistics Bulletin for the second quarter of 2004 figures show that average new house prices nationwide rose by 10.7% y-o-y to €246,229. This represented a 3.5% increase on quarter 1 2004. Average second-hand house prices rose by 12.7% y-o-y to €301,620. This represented a 10% increase on quarter 1 2004. 

In the same period, average new house prices in Dublin increased by 11.6% y-o-y to €322,899. This represented a 3.6% increase on quarter 1 2004. Average second-hand house prices in Dublin increased by 8.8% y-o-y to €399,5. This represented a 10.1% increase on quarter 1 2004. 

PERSONAL CONSUMPTION

Retail Sales

Provisional figures for the month of October 2004 (published December 17^th) show that the volume of retail sales increased by 1.2% y-o-y; if Motor Trades are excluded the increase was 2.9%.  For the January-October 2004 period the y-o-y increase was 2.8% for All Businesses and 2.9% for All Businesses excluding Motor Trades.  The annual increase in Retail Sales volume in 2003 as a whole was 0.9% while the corresponding increase excluding Motor Trades was 1.6%.  The volume increase in sales in 2002 was 0.1%, while sales excluding Motor Trades increased by 1.6%.  Data for the month of November will be published by the CSO not later than January 21^st.

Car Registrations

Data from the Revenue Commissioners, released on December 6^th, indicates that new car registrations in November 2004 were down by 4% on the same month in 2003. Cumulative registrations of new cars in January-November were up 5.93% year-on-year, while the increase for imported used cars was 85.6%. 

OUTPUT AND EXPORTS

Manufacturing Output

Manufacturing output volume decreased by 6.4% y-o-y in October 2004, and was 1.7% higher in the year to October relative to the same period in 2003. According to CSO data, manufacturing output volume grew by 6.4% in 2003, following an 8.4% increase in 2002. (Source: CSO, Industrial Production and Turnover. Released 10 December 2004. Next release for November 2004 due not later than 11 January 2005).

Exports

The volume of total exports, including both merchandise and services exports, increased by 5.2% in the first 9 months of 2004, relative to the same period in 2003.

First estimates from the CSO indicate that the value of merchandise exports in the month of October 2004 decreased by 9% y-o-y. In January-September 2004 merchandise exports were 3% higher in value terms than in the corresponding period in 2003 and in the period January-September 2004:

·        Exports of Medical and Pharmaceutical products increased by 11%

·        Exports of Computer equipment decreased by 10%

·        Exports to the UK decreased by 0.3%

·        Exports to the US decreased by 1% 

(Source: CSO, External Trade. Released 23 December 2004. Next release for December 2004 (provisional) due not later than 28 January 2004).

(Source: CSO, Quarterly National Accounts. Released 22 December 2004. Next release for Q4 2004 due not later than 31 March 2005).

TOURISM

According to CSO figures, there were 6,369,000 overseas visits to Ireland in 2003, an increase of 5% over 2002.  The number of visits abroad by Irish residents was 4,929,000 in 2003, an increase of 6.4% on 2002.  Earnings from visitors to Ireland in 2003 amounted to €4,059 million, an increase of 1.8% over 2002.  Expenditure by Irish visitors abroad amounted to €4,145 million in 2003, an increase of 4.9% over 2002.

In the first three quarters of 2004, there were 5,147,000 overseas visitors to Ireland, compared with 5,009,000 in the same period in 2003, an increase of 2.8%.  The number of visits abroad by Irish residents in the first three quarters 2004 was 4,219,000, an increase of 9.4% when compared with the same period 2003.

AGRICULTURE

Output

The CSO release Output, Input and Income in Agriculture 2004 - Advance Estimate, released on the 9^th December 2004, indicates that agricultural output at basic prices increased by 1.8% in 2003.  This follows an increase of 2.4% in 2003.

Farm Incomes

The same CSO release Output, Input and Income in Agriculture 2004 – Advance Estimate, shows that aggregate farm incomes (i.e. operating surplus) grew by 1.3% in 2004, following an increase of 2.7% in 2003. There was little change in the value of milk output and net subsidies between 2003 and 2004, while increases in the output value of livestock were largely offset by a decrease in the output value of marketable crops and increases in input costs.