Judging the health of the economy from the latest national accounts from the Central Statistics Office is no easy task. They show an apparently healthy 6.3 per cent increase in Gross Domestic Product (GDP) last year. However using the other commonly quoted measure of economic activity, Gross National Product (GNP), the growth rate is just 0.6 per cent.
So which gives the more accurate measure? Or do we have a two-speed economy?
As in many arguments, the truth probably lies somewhere in the middle. GDP undoubtedly overstates the real level of economic activity, as it includes all the profits earned by multinational industry here. Because these profits grew rapidly last year - particularly in the pharmaceutical sector - GDP was recorded to have grown very quickly.
Equally, GNP growth appears to have been unnaturally depressed by a drop in the profits of Irish companies overseas and by financial movements of IFSC companies, meaning that the 0.6 per cent growth rate probably understates the growth of the domestic economy.
Adjusting the GNP figures for these special factors would yield a growth rate of 2-3 per cent last year, which is probably a more accurate reflection of real activity. However it is clear that growth tailed off towards the end of the year. The figures show an actual fall in GNP of 2.3 per cent in the final quarter and while this may overstate the downturn, it does appear that growth halted late last year and that the economy entered 2003 on a weak note.
In many ways we have a dual economy, with a multinational sector where growth is strong, and a less dynamic domestic sector. This analysis cannot be pushed too far - after all, many companies in the information technology sector have suffered recently, with further evidence in yesterday's announcement of the closure of the Celestica plant in Swords, Co Dublin. However, exports and industrial output have been supported by growth in the more modern sectors in recent years.
The figures carry lessons for policymakers. One is the importance of remaining an attractive and competitive location for foreign investment, to support growth in the years ahead. Efforts must also continue to deepen the involvement of these companies in Ireland and to maximise the amount of research conducted here.
The other message is that much of the domestic economy is under pressure, which will have increased due to the recent strength of the euro. The Cabinet is holding a special meeting to discuss these issues next week and a clear plan of action is needed to deal with deteriorating competitiveness.