Economics: Irish manufacturing output projected to have declined year-on-year in October
Also this morning, the CSO will publish Irelandâ€™s official industrial output for October. In the three-month period, July to September, Irish manufacturing output was down 1.1% on the preceding three-month period. Furthermore, in September itself, production was down 3.2% in the year, following a revised annual increase of 1.9% (+2.4%) in August. In the first three-quarters of 2017, output was 3.8% lower on average than the same period last year.
The â€œModernâ€ sector posted a monthly increase of 0.2% in September but was down 2.3% in the year as against a revised annual rise of 3.8% (+4.1%) in August. Meanwhile, output from the indigenous sector fell 1.1% in the month and 10.4% in the year in September, the sharpest annual fall in a number of years, and the third decline in the past four months.
There have been worries about the fall in sterling against the euro since the â€œBrexitâ€ referendum and its potential negative impact on the industryâ€™s exports, of which just under a half go to the UK. Indeed, following â€œBrexitâ€ the biggest losers going forward will most likely be the indigenous companies.
For 2016 as a whole, there was an average increase in manufacturing output of just 0.5% as against large annual rises of 38.5% and 24.2% in 2015 and 2014 respectively. Output this year looks set to post a single-digit drop in volume terms on 2016. The outlook for production next year remains very uncertain given the whole â€œBrexitâ€/sterling issue. At this stage, we would say another single-digit decline is on the cards.
As regards October, we are looking for a 5.0% annual fall in manufacturing output.
Alan McQuaid (05/12/17)