New CSO figures bolster image of boom economy

New figures published by the Central Statistics Office (CSO) reflect the continuing boom in the economy, with gross domestic product (GDP) increasing by 9.1 per cent in the first three months of the year on the comparable period in 1998, slightly ahead of economists' predictions.

GDP - the value of goods and services produced in the State - reached £13.86 million (€17.6 million) in the first quarter, up from £12.69 million in the January-March period last year.

Separate figures, also published yesterday, show that the value of goods and services produced in the Border, midland and western regions, which have Objective 1 status for EU structural funding, fell to 71 per cent of the State average in 1997, down from 79 per cent a year previously. However, the underlying real level of output per person in the region rose to £9,328 in 1997, up from £8,441 in 1996 and from £5,875 in 1991.

The quarterly national income figures - produced for the first time - show that Gross National Product (GNP) rose by 6.8 per cent in the first quarter this year, the CSO said.

GNP, which adds earnings abroad by Irish companies and citizens to GDP and subtracts earnings by foreign-owned firms repatriated from the State, was worth £11.87 million. This had risen from £11.12 million in the first quarter last year.

The CSO said earnings abroad by Irish firms and domestic earnings by foreign firms can "fluctuate significantly" from one quarter to another.

"This can lead to significant differences between the GDP and GNP growth rate for the same quarter," it said.

GNP rose by 8.1 per cent in 1998. The 9.1 per cent increase in GDP in the first quarter this year compares with annual growth of 8.9 per cent the same period in 1998.

The CSO added that the GDP and GNP figures are not seasonally adjusted, stating that a longer series of data would be required before this was feasible. "Looking at the GDP figure, that's probably a bit of a surprise. Most people have been expecting slightly lower growth this year on last," said Mr Dermot O'Brien, chief economist at NCB Group. "In general, what it is confirming is that the economy is still firing on all cylinders. Addressing an American Chamber of Commerce in Ireland Thanksgiving lunch, the Taoiseach, Mr Ahern, welcomed the figures.

The CSO said the quarterly statistics should be regarded as provisional and subject to revision as some of the data used was of "lesser reliability" than those used for the annual national accounts.

This is the first time the CSO has released quarterly data on the State's economic performance. The move comes as a result of an EU rule obliging member-states to produce such figures.

Year-on-year consumer spending in the first quarter rose by 12 per cent, industrial output grew by 11.5 per cent, while output in the distribution, transport and communications sectors rose by 13.1 per cent. The CSO's breakdown of regional output, a measure of the value of goods and services known as gross value added, showed output in the southern and eastern regions was 10 per cent above the State average in 1997.

Output in the newly created Objective 1 region was 74 per cent of the EU average in 1997, contrasting with output in the south and east of the State which was 15 per cent above the EU average.