Strong year for manufacturing

Last year was the best year for manufacturing since 2002, but a strong euro and slowdown in global demand means the success is unlikely to be repeated in 2008, economists warned yesterday.

Industry recorded its best year in 2007 in five years, with output around 8 per cent higher in the first 11 months of the year than it was in the same period in 2006, according to new figures published by the Central Statistics Office (CSO).

The new data on production levels by manufacturing industries shows that the sector made a "a substantial contribution to economic growth" last year, according to Fergal O'Brien, senior economist at employers' group Ibec.

But Mr O'Brien warned that recent currency movements would undermine continued growth rates and put pressure on exporters.

"A strong focus on cost competitiveness is essential if industry is to continue to contribute to economic growth this year," he said.

Alan McQuaid, economist at stockbrokers Bloxham, described the overall performance of industrial output in 2007 as "impressive", but said weaker growth in manufacturing was likely in 2008 as the strong euro made Irish goods more expensive and global demand slowed.

The CSO figures show that production by manufacturing industries in November 2007 was more than 16 per cent higher than it was in November 2006. But the seasonally adjusted volume of industrial production for the three months from September-November was 3.1 per cent lower than in the preceding three-month period.

The increase in output came largely from the technology and chemical industries, with the so-called "modern" sector recording a year-on-year rise in production of 23.3 per cent in November.