Chemical sector boosts growth in industrial output

A positive swing in activity in the chemicals sector helped industrial output make a strong rebound in July, according to new figures from the Central Statistics Office (CSO).

Industrial output bounced back during the month, with output growth in manufacturing companies increasing 14.4 per cent on June's figure and by an annual rate of 14.5 per cent. Total industrial output was 14 per cent higher in July 2007 than it was in July 2006.

Employers group Ibec welcomed the turnaround, which means output growth in manufacturing has now increased by 7.3 per cent this year, the fastest pace of growth since 2002.

"This turnaround was almost entirely due to a positive swing in the output of the chemicals sector, which recorded an annual increase of 34.4 per cent in July," said Ibec chief economist David Croughan.

He said the figures indicated a "solid performance", given the poor year experienced by the beverages sector and a recent fall in the output of the wood sector, which is related to the slowdown in housing. The seasonally adjusted volume of industrial production for manufacturing industries for the May-July period was still 0.5 per cent lower than the preceding three-month period.

Bloxham Stockbrokers economist Alan McQuaid said that even excluding the chemicals sector, manufacturing output grew by a healthy rate in the first half of the year. Assuming there was no significant loss of competitiveness over the next few months, the manufacturing sector was now forecast to record an average volume increase of 7 per cent in 2007, he said.