Ireland: Industrial sector growth softens but remains strong in August
Latest reading: Industrial output expanded 4.5% in month-on-month seasonally adjusted terms in August, which was a deterioration from July’s 7.5% increase but still marked a robust rise. The slowdown was partly due to a deterioration in growth of the modern sector, whose output tends to be volatile due to the presence of multinational-dominated industries, such as chemicals, pharmaceuticals and computers and electronics. Meanwhile, traditional sector output fell at a more moderate pace.
On an annual basis, overall industrial production rose at a faster rate of 12.0% in August (July: +9.1% yoy), the best result since March. Accordingly, the trend improved sizably, with the annual average variation of industrial production coming in at minus 11.2% in August, up from July’s minus 14.6% reading.
Outlook: Despite August’s deceleration, over July–August as a whole, industrial production was up 8.8% from the prior three months (Q2: 5.3% s.a. qoq), boding well for growth of the sector in the Q3 GDP statistics due for release later this year. However, the data may be revised significantly ahead due to the heavy presence of multinational firms in Ireland’s industrial fabric.