Latest data confirm economic slowdown

The latest batch of economic data points to a marked slowing of the economy in the third quarter. Last month's industrial survey by IBEC and the ESRI, along with retail sales and industrial production data for September, confirm a picture of slower economic growth. IBEC said its October survey was the first indicator of business sentiment following the September 11th attacks in the US.

"It showed the incipient pick-up in business confidence beginning to emerge in the August survey had been significantly reversed in October," sid IBEC economist Mr David Croughan said.

Production expectations, order books and new orders, which all moved out of negative sentiment in August, had become seriously negative in October, he said.

Only 4 per cent of firms surveyed said order books were above normal last month compared to 29 per cent which said they were below normal.

The survey also highlighted a collapse in export confidence particularly noticeable in the capital goods sector, where three quarters of firms believed their exports in future months would be lower.

Provisional industrial production data released by the Central Statistics Office yesterday also painted a gloomy picture of the manufacturing sector. The volume of industrial production was 7.3 per cent lower in the three months from July to September on a seasonally-adjusted basis than in the preceding quarter, the CSO said.

Although production was up 5.2 per cent year-on-year, this compared with a similar rise of 8.6 per cent in August.

AIB economist Mr Oliver Mangan noted there had been a sharp fall in the activity of the high-tech multinational sector in the Republic. In the June to August period, production of office machinery and computers was down nearly 23 per cent on the preceding three months, while output of electrical and optical equipment was down nearly 11 per cent.

Meanwhile, September's retail sales were again depressed by the less buoyant performance of the motor trades this year. CSO figures show the value of September sales was 4 per cent higher than in the same month last year. If the motor trade is excluded, sales values grew by 8.9 per cent, but this is still well down on the 16.3 per cent growth rate recorded in September of last year.

The volume of retail sales, which excludes price effects, recorded a year-on-year increase of 1.4 per cent in September. But if cars are stripped out, this would have been larger, at 4.9 per cent.

On a three-month basis, which the CSO says gives a more stable indication of underlying trends, sales from July to September rose by just 0.4 per cent compared to the three months to end June.