Republic suffers sharpest fall in industrial production

The Republic suffered the sharpest monthly drop in industrial production during September of all the the euro-zone members, according to data released yesterday.

Production here fell by 3.2 per cent, compared to a euro-zone average of 0.2 per cent, EU statistics office Eurostat said.

However the State recorded the second-highest trade surplus in the euro zone for the month at €25 billion.

Analysts said the productivity slump highlighted volatility in the Irish economy, attributable in part to price fluctuations in the multinational sector.

Cautioning against reading too much into the results, economist Mr Colm McCarthy, of consultants DKM, said month-by-month output valuations were at the mercy of global market forces.

The Republic's heavy reliance on multinational investment left it vulnerable to dips and surges in international pricing, he said.

"Industrial output has been extremely volatile for the past three months. But this does not suggest that the economy is headed for long-term decline. Rather it proves that the value of output can fluctuate widely.

"There is a lot of noise in this data as it refers to Ireland - random fluctuations that may mean less than they might at first appear to."

The decline across Europe was smaller than predicted by economists, who had on average expected industrial output to fall 0.4 per cent on a monthly basis and to drop 0.7 per cent from a year earlier.

Eurostat revised August's figures to show output rising by 0.2 per cent on a monthly basis and falling 1.2 per cent year-on-year. It had previously reported the changes as an increase of 0.6 per cent and a decline of 0.8 per cent respectively.

Seasonally-adjusted data showed average euro-zone production, excluding construction, contracted by 0.1 per cent in the third quarter compared with the second, the first quarterly contraction in output reported this year.

Germany recorded the biggest monthly fall in production aside from Ireland at 1.4 per cent. The biggest increase was seen in Luxembourg, at 4.2 per cent.

However, industrial production in the State actually grew by 8.2 per cent in September compared with the same month last year, according to the Central Statistics Office. Industrial production for the third quarter slumped by 7.6 per cent.

Separate figures showed that the eurozone recorded a trade surplus of €9.5 billion in September.

Exports were up 8 per cent on the same month a year earlier, while imports climbed 1 per cent.