INDUSTRIAL PRODUCTION fell by 10.3 per cent in November as activity in high-tech and chemical sectors contracted sharply, according to new figures.
However on a seasonally-adjusted basis, the volume of industrial production in manufacturing industries actually rose by 1.6 per cent between September and November, when compared with the preceding three-month period.
Figures released by the Central Statistics Office yesterday showed that production in the “modern” sector, which includes the high-tech and chemical sectors, slumped by almost 14 per cent in November.
Production in the traditional sector also dipped by 1.7 per cent in the month.
The figures show that seasonally-adjusted industrial turnover was 10.2 per cent higher in November, versus October.
This data follows last week’s NCB Purchasing Managers’ Index, which indicated that the manufacturing sector shrank again in December.
Conall Mac Coille, chief economist with Davy stockbrokers, cautioned against inferring too much from yesterday’s figures.
While the 10 per cent fall in Irish manufacturing production could reflect the impact of a contracting European economy, he pointed out that industrial production data can be extremely volatile.
“Double-digit monthly declines are not uncommon in the Irish industrial production data even during relatively benign economic circumstances,” he said.
However he warned of the “bigger picture”, predicting that the euro area slowdown will have a stronger negative impact on demand in 2012.
“Industrial production growth slowed through 2011, which must in part reflect weaker demand conditions.” he said.
“This trend will continue in 2012 given weaker euro area demand.”
Alan McQuaid, chief economist with Bloxham stockbrokers, said it was vital that Ireland’s manufacturing sector remained healthy and competitive, given that domestic demand was so weak.
“We still think a strong manufacturing production/export performance will provide the platform for a sustainable Irish economic recovery over the next few years,” he said.
