Latest CSO Data Post author By Philip Lane Post date September 22, 2011 The new national accounts release is here. The BOP release is here. Categories In Uncategorized 56 Comments on Latest CSO Data ← Breaking Up is Hard to Do → Monetary Dialogue Briefing Papers: September 2011 56 replies on “Latest CSO Data” Encouraging numbers. This is a massive blow for the doom industry. Bye bye Morgan Kelly. Your Kilkenny rant in August seems laughable now. GDP up 1.6% q-o-q and GNP up 1.1% q-o-q. GDP up 2.3% y-o-y and GNP up 1.1% y-o-y. And, to top it up, the q-o-q increase in GDP in Q1 revised up from 1.3% to 1.9%. GDP up a cumulative 3.5% in the first half of 2011, almost certainly the largest increase in the EU15. It looks like my much-derided prediction on this site in September 2009, that the recession bottom would be in Q3 2009, was out by just one quarter. It now clearly bottomed-out in Q4 2009. Between Q4 2009 and Q2 2011 GDP rose by 3.4% and GNP by 2.6%, which are very respectable figures by EU and OECD standards, and certainly the Irish economy is now growing faster than the UK economy. Brian Lenihan was right after all. My decision to move my savings from the UK to Ireland in June 2007 looks more and more inspired. Overall, these are excellent figures and go a long way to ease the pain endured last Sunday. @ JtO first back to back positive quarterly GDP figs since Q3 2006 as well. Terrible that its taken so long to do that, but still encouraging that we may finally be turning around sustainably. @Eoin, Wow! Hadn’t realized it was that long! Almost 5 years! How would you interpret yesterday’s trade figures? Monthly volatility or something to be concerned about? @ DE trade figures are indicative of a general EU/EZ/global slowdown taking place (though the domestic stuff, as opposed to mnc, like food n drink was actually quite good). There’s volatility in there as well, so 1mth of data difficult to tell, and chemical/pharma is traditionally quite a stable/defensive sector, but don’t think anyone is expecting the next few months to be good given the global outlook shifting so much lower. Overshadowed by the GDP figures, the figures for births and deaths in Q1 2011 were also published this morning. http://www.cso.ie/releasespublications/documents/vitalstats/2011/vstats_q12011.pdf Against all predictions, the number of births rose 7.6% in Q1 2011 compared with Q1 2010 and was an all-time high of 19,950 (v 18,535 in Q1 2010). This confirms the census results. If the population of young persons was falling dramatically due to mass emigration, as many media commentators claimed pre-census, there is no way this could have occurred. When you say birth’s are at an all time high, is that in the history of the State of does it go back to the pre-Famine years? More related to yesterdays trade numbers, but what exactly do we export to Belgium? And how has it become our second largest trading partner? Agreed, this is welcome news. The words “…turning a corner…” are certainly being heard more frequently. However surely it’s all for nought, what with the threat of global recession and myopic politics casting a rather large (certainly bigger than the Island of Ireland) shadow over all of us. Every editorial I read and news report I hear states we are staring into big black hole again unless leaders show some leadership and soon. In other words our [Ireland] fate is well out of our hands. The quote “those ignorant of history and destined to repeat it” seems particularly relevant. Of course that should have said “are destined to repeat it”, you get my point though. @dreaded estate AFAIK Belgium is essentially a warehouse for Europe and trade stats are calculated according to the first destination. Forgive my ignorance but can some one explain the difference between table 1 and tables 2 for me, my confusion is the headlines are the same title is different re GNP/GDP I think the main difference is the reference 2009 vs curret prices. Quite a diiference if you look at growth yoy for Q2 when current prices are used BOOM! @bond what happening to the spreads? @ Christy spreads slightly wider (+5-10bps), but everyone is slightly wider today, and Irish bonds probably outperforming marginally the rest of the EZ (ex Germany, obviously). O no should have DOOM! world falling apart @DE On the trade data, fall in July is dominated by pharma/chem, which as EB says is unlikely to be greatly affected by global slowdown. Global weakness definitely a contributory factor, though a great deal lkely to be just m-o-m volatility. I suppose we have got to hope that the building and construction figures have leveled off The overall industry figures are now higher than 2007 despite the collapse in construction @JTO The numbers are better than expected no doubt but dancing on Morgan Kellys analysis isn’t going to generate 1 additional job in the domestic economy – with or without the lagged effect in terms of job creation following a better economic environment. I happen to believe the second half of 2011 will be significanly worse than H1 – PMI numbers across the region since July have shown are marked downward trend and sadly Q3 numbers will likely reflect this given the very open nature of the Irish economy. Q4 – despite being only a week or two away – is open to pure speculation as to where economies eventually end up – the balance of probabilities would suggest weaker numbers given what we saw overnight out of China and elsewhere – so keep the champagne firmly iced, no bottom calling quite yet. @Eoin Bond/YOB Caution advised by CSO…from Reuters “The jump in quarterly GDP was fuelled by a 6.4 percent increase in capital investment and officials from the Central Statistics Office cautioned against reading too much into the figures. Ireland’s quarterly GDP data are notoriously volatile due to the inclusion of the earnings of Irish-based multinationals. The data reinforced the view that Ireland’s economy is on a two-speed track with a growing export sector compensating for a domestic economy still stuck in the doldrums due to an unprecedented housing crash and prolonged austerity measures. Gross National Product (GNP), seen by some economists as a more accurate indicator of the state of the economy because it strips out multinationals, rose 1.1 percent in April-June, broadly meeting expectations for a 1 percent increase.” Is there a word for an economy that’s growing at the same time as unemployment is growing and more businesses are closing than opening (other than ‘paradox’ or ‘conundrum’)? Puts me in mind of India (as per Wiki – “despite fast economic growth India continues to face massive income inequalities, high unemployment and widespread malnourished children”). Ireland is the India of Europe? I presume a lot of this ‘growth’ is down to how much MCN’s decide they want to shove through Ireland in any particular year and not down to the Irish actually doing it for themselves (other than being the workers in the factories, following orders)? @ JTO This is a massive blow for the doom industry Quarterly data is usually volatile, would you come on with the same eagerness when the numbers are less rosy? @ All It’s good for confidence to have some positive data. There has been a jump in stocks by over €700m ( a + for growth) in the quarter while industrial orders are slowing; the net exports total is boosted by the low imports. The CB reported today that lending to non-financial/property Irish SMEs fell 3.3% in Q2 2011 and 9.9% in 12-month period. AIB is now requiring anyone with an overdraft to have a minimum transfer each month into an account equivalent to the limit — which restricts credit to people with good records. Without a flow of startups, the domestic economy will remain in the doldrums. In the US, banks and credit cards are the main sources of funding for startups. On the FDI side, attention on recent job losses will move on for a time at least but there are huge vulnerabilities in the pharma sector and with attention to US firm overseas cash hoards, US corporate tax reform is likely to get attention in coming years. I saw the clip of Bruton speaking on Prime Time from Miami on potential job losses at Aviva. He referred to indigenous innovation, having visited a tech cluster in North Carolina (having got most of the big firms we know have depend on smaller ones in a country which is itself facing huge unemployment problems.) I got a press release overnight from Brussels claiming that new export opportunities worth €500m a year by 2020 could emerge for Irish companies trading with Japan and Korea according to a report conducted on behalf of the European Commission. For ‘Irish companies’ read US companies. Albert Reynolds was the last minister in charge of enterprise policy who had direct experience of developing an export business; everyone of his successors were best at trading in bullshit. Good GNP number. Expansionary fiscal contraction here we come 😆 BOP also out today. Still mired in the negative. The rate of movement towards positive slowing down. Bruton’s comments on today’s data. He says ‘It is particularly important that the knowledge-based sectors are performing so well.’ – – a person answering a phone in a call centre is a ‘knowledge’ worker but in the local credit union? Speaking from South Carolina, where he is leading a group of 67 companies on a trade mission to the United States, the Minister said: “A strong export performance will be crucial in driving the recovery in the wider economy. Today’s figures, the latest in a growing body of evidence of high levels of performance in manufacturing and exports, show that an export-led recovery is becoming a real possibility. This is particularly welcome at a time when we are receiving mixed news about the global economy. “It is particularly important that the knowledge-based sectors are performing so well. Our services exports are continuing to grow even faster than our Merchandise exports, which themselves are performing strongly – up 6% in the first half of this year. “Computer services is the largest services export category, with exports of €15.7bn in the first half of this year, an increase of 15% on the first six months of 2010. Other categories showing strong performances were insurance, financial services and tourism”. From the Times “It is the first time since the recession began that GDP, GNP and domestic demand all grew in the same quarter.” @hoganmahew “Expansionary fiscal contraction here we come” Hah, that’d be neat. You do worry that we are going to need this 3.4% growth so far this year that JTO referred to for the H2 slump though! Wonder if the Government will persist with a forecast of 0.8% growth this year (April SPU) or follow the IMF, CBI and ESRI into cutting. @ CP “Caution advised by CSO…” As i said in the other thread at the very start, standard cavaets apply to quarterly data…but its good news rather than bad news, “your name” n all that… With the Dubs/rugger “feelgood effect” it will be a glorious Q3 as well. It’s also funny to see the way that “overcapitalize the banks” is the new hot recommendation from the IMF to the Eurozone countries. Note also that it’s becoming established fact that the market can distinguish Ireland from our fellow patients in the IC ward. http://blogs.wsj.com/source/2011/09/21/ireland-achieving-quiet-success/ @PR Guy Do we need to re write ‘The Commitments’ as a result: Jimmy Rabbitte: Do you not get it, lads? The Irish are the blacks of Europe. And Dubliners are the blacks of Ireland. And the Northside Dubliners are the blacks of Dublin. So say it once, say it loud: I’m black and I’m proud. to.. ..the Irish are the browns of Europe…: I’m brown and I’m proud..’ somethings not quite right don’t you think ? Good news, with the usual proviso about unadjusted and volatile quarterly series like this. I wouldn’t hang my hat one way or the other on a recovery being found in these numbers, but the stocks are encouraging, as are the contributions from private investment in gross fixed capital formation. @ Frank Galton Thanks for the WSJ link “Ironically, a significant risk to Ireland and the trajectory depicted here is a further blow-up of other peripheral countries and a further slowing of the euro zone and world economy,” BBH said. And, as they say in NY, that’s the truth. @Yields or Bust … re write ‘The Commitments’ … well, after Eden Park – perhaps we are the ALL Blacks of Europe …. and with the increase in the birth rate, and all this hors-territy – will we all be eating batter-nappies from The Van [imho one of the best comedy scenes ever written 😆 ] ….. As Lucretius, that great disciple of Epicurus put it: Great wealth consists in living on a little with a contented mind; for of a little there is never a lack. [On the Nature of Things] Quiet! @Michael Hennigan Minister Dick Bruton appears to have a Lucretian adviser for the lower orders – no lack of leetles for the leetle peeple …. John McGuinness should join Fine Gael. @John TheOptimist One of your own ‘Black’ Norners on A. N. Other McGuinness http://www.irishtimes.com/newspaper/opinion/2011/0922/1224304521153.html @ Michael Hennigan When did AIB put in place these suggested draconian rules for O/Ds ? Do they apply to business and personal accounts ? If what you say is true this Bank should be closed down the same as Anglo as they are damn all use to our economy only a hindrance. Anyone see this craic with the Italian town deciding to launch its own currency: http://www.nytimes.com/2011/08/30/world/europe/30italy.html?pagewanted=all Nothing stopping us trying the same thing, Cork people pretty much want independance anyway, it would be a good test bed, I suggest the ‘Keano’ as a replacement for the euro. Good article from Nouriel Roubini on how to solve the current problems, but will anyone listen… http://www.economonitor.com/nouriel/2011/09/19/how-to-prevent-a-depression/ The CSO figures serve to further illustrate a simple point – Ireland was the first country to show symptoms of a global problem and never the cause of it. At the risk of p***ing alot of people off, there were those on this board who consistently and resolutely maintained the Irish crisis occurred solely because of incompetence and greed in Ireland There were those of us who held that it was in fact a global failing of fincancial governance. To those that never agreed with point of view and constantly shot it down in favour of paddywhacking … humble pie….now!!!! Just looking at 3 Greek bank stock prices.. 57c , 33c and 35c. Just like our own banks before recaps, ready to implode. And have a look at Unicredit…at 66c. and that’s a big bank. I also noticed in an article in the IT today that we still have 98b from the ECB and 56b from the ICB so we are not making any progress there. Just as well JCT is providing 3 month money from October. And did I read that exports were off 10% in July? As someone said, hold the champers. Let’s hope for further rays of light soon – 1. Falling unemployment / rising employment and 2. Bouyant tax revenues Buoyancy is what we want! @ CP 98bn from the ECB is for all the banks resident in Ireland. Don’t have it to hand, but think the ‘domestic covered’ bank figure is more like 75bn. @JTO. You are incorrect in the conclusions you arrive at below based on the birth statistics. Against all predictions, the number of births rose 7.6% in Q1 2011 compared with Q1 2010 and was an all-time high of 19,950 (v 18,535 in Q1 2010). This confirms the census results. If the population of young persons was falling dramatically due to mass emigration, as many media commentators claimed pre-census, there is no way this could have occurred. If you look at the figures closely you will see from table 1B that: The proportion of births to mother under 24 has fallen from 17.8% to 12.8% of total births, a fall of 5%. The proportion of births to mothers over 30 has risen from 59.2% to 64.7% of total births, a rise of 5.5% of total. The biggest rise of 3% occurs in the 35 to 39 years ‘mother catagory’. Therefore it is not ‘young’ mothers that are causing the increase in the birth rate. The increase in births is coming mostly from mothers 30+. It is still perfectly possible for people to be emigrating in large numbers given the above facts. As 74% of all births are either first or second child births, the rise in the birth rate is clearly due to women deciding late in the motherhood cycle to start a family. Perhaps the economic situation has a big part to play in this. Both in causing women to delay starting families in their younger years and also persuading women that now is an opportune time to start families. But the birth statistics prove nothing in relation to emigration. @all Tuned to the VB show – Marshall Auerback (Levy Institute) was a revelation – and fair play to the FEASTA organisers (on a previous thread) for inviting him. Perhaps a guest thread on here pls …. Methinks that DanO looked a wee but uncomfortable to be within spitting distance of a sane, erudite, pragmatic minsky_ite – but that is purely a personal opinion. Joan Collins has done well since being dismissed as a ‘whinger’ [which she most certainly is not] outside the Dail as Bertie bemoaned his greatest regret – da bertie_bowel …. but enough of that …. @An Taoiseach When is the RESHUFFLE? As I’ve noted before on this blog, and Blind Biddy was literally screaming at the telly (gave her a little drop for Aurthur’day – and a chaser to cool her down) …. Minister Lucinda is completely out of her depth: early on she had a ‘minsky moment’ and, of most concern, she did not realise it! Then the ATM/Argentina spin – and most disconcerting from our representative in Europe “LC: I’m not sure which one of the Treaties” – and flashbacks to Cowan and McCreevey who publicly stated that they did not ‘read it’ (Lisbon Treaty I, that is) I realise Taoiseach that times are tough, and that you are implementing Fianna Fail/PD/gp policy – but even the Great Wikla Egoist Dikeen La Roche is preferable to what the citizenry had to view tonight. Time for the ReShuffle. @David Yes – impressive display Dan O Brian seemed unaware that all money except the precious is created into existence out of nothing…… The deduction of goverment debt by the CB seems to be gaining traction also – this monetization of debt must stop (locking it up withen banks so that it rots) – the money must be spent into existence to increase capital wealth. However the spending of credit or money into the economy is wildly corrupt – can the CBs just liaise with a few of their multinational brethern and inject money into the economy to create truely massive engineering Projects ? The Tusker tunnel project would be a great idea in my opinion – the capital exported further and further out as the dollar bubble / bushfire raged must be redirected inwards again – it has reached the ends of the world – and there is no more worlds no conquer or more accuretly strip……. Its time to create new land / capital with modern Windmills rather then fund financial wars to game and extract. However the “authorties” may worry that we could make the place glow withen a few decades. I suppose you can take any idea too far……………………… http://www.youtube.com/watch?v=4n298WTxjPc @ David O’Donnell Dan was basically adopting the Lord Denning line of “A vista too appalling to even consider”. Well we will just have to start looking at sterling its worth taking a look at the Green dollar. It is view being adopted by the whole cabinet. This growth thing is just a load of hot air It makes me laugh when I look at world economic blogs and then see this wonderful story that has been conjured up for us. I never believe the CSO and have not filled in one of their tedious forms in years. Just to remind all on this thread, Ireland’s “growth” such as it is, can and will be wiped out in the blind of an eye. We have done sweet feck all to balance the budget and yet miraculously growth appears? I would say this “growth” is more about engendering the “feel good’ factor as we draw down and spend the bail out No 1. I am still with Morgan Kelly and Constantin Gurdgiev on Irelands crisis, as for the happy statisticians at the CSO and the ESRI they are just trying to put on the green jersey and keep themselves in jobs at least half of them are surplus to requirements. In fact, the correct way to read this is “they say the economy is growing”. Well that means there will be no growth! @Robert Browne I don’t know really – the whole financial system is so wildly synthetic now that it is no longer a fractional system – balancing our budget would just transfer our consumption elsewhere and thus increase our exports as others consume MY SURPLUS But I don’t want to increase exports I WANT TO CONSUME. Why should I sacrifice my material happiness for a symbolic token of nothingness – poetic yes but why ? Is there a word for an economy that’s growing at the same time as unemployment is growing and more businesses are closing than opening (other than ‘paradox’ or ‘conundrum’)? This is the Viagra Economy. GDP is up due to products like Pfzier pills, microsoft CDs, and software licences, shipped though Ireland for tax purposes buy international companies. Low labour, high margin businesses all, their success or failure has a negligible effect on employment. Assuming you actually believe the CSO figures of course. @ David O’Donnell She does appear to be a poor performer, publicly at least. I often get the feeling she’s only one rebuttal away from being stuck. Conversing with VB on McGuinness and the treaties were good examples of this. @ Robert Browne “I never believe the CSO and have not filled in one of their tedious forms in years.” So they’ve been under-estimating true growth due to your non-filling-in? 😀 @ObsessiveMathsFreak “This is the Viagra Economy. GDP is up due to products like Pfzier pills, microsoft CDs, and software licences, shipped though Ireland for tax purposes buy international companies. Low labour, high margin businesses all, their success or failure has a negligible effect on employment.” +1 Exactly. A GDP rise made up largely of transfer pricing and corporate tax avoidance means nothing for the well-being of general population. I can’t believe how some on this thread find it inexplicable that the (vastly understated) rate of unemployment does not fall as a consequence. When and if Europe gets round to a root-and-branch write-down of unrepayable debts then the loss of tax haven status will be the price of remaining in Europe. It’s not difficult to imagine the boomsters returning from their sojourn on Styx, bragging again on the discovery of a philosopher’s stone that would do a Midas on hot air. The Irish Independent: Economists were also upbeat and highlighted that growth is far outweighing countries like Germany and France, where these economies are effectively static. “Following a seasonally-adjusted quarterly increase of 1.9pc in the January-March period, GDP posted another strong quarterly rise of 1.6pc between April and June,” said Alan McQuaid, chief economist at Bloxham Stockbrokers. “Indeed, of the Euroland countries, only the new ‘kid on the block’, Estonia, outperformed Ireland in the quarter. Alan McQuaid Sept 2007 in The Irish Times: “I’m sick to death of people writing off the Irish economy and next year could easily see the Celtic Tiger roaring more loudly than many pessimists think.” Alan McQuaid Sept 2008: GDP to grow 4% in 2010. Alan Ahearne dissented from the consensus 10 days before the Lehman crash: “The simple and honest answer is that the slump will be severe and will probably last longer than most people think. The consensus among economic forecasters is for a moderate decline in real GDP this year, followed by a pick-up to low positive growth in 2009. A robust recovery, with growth of roughly 4%, is pencilled in for 2010.” May 2008: 8 months after the onset of the credit crunch, the ESRI Medium-Term Review said the Irish economy was heading towards a real economic growth rate averaging 3.75% annually over the next decade. The Institute said business services exports would account for 70% of all Irish exports. After below-trend growth in 2008 and 2009, the ESRI said economic growth would rebound in 2010 when it was forecast to exceed 5%. @ TRP On AIB, that information on overdraft policy came from a branch. All personal credit issues have to be routed through a department in Sandyford; the only areas of discretion left to branches are in relation to student loans and some aspects of business lending. @OMF “This is the Viagra Economy.” While the growing and distressing gap between GDP and GNP performance can be put down to this, it is not the whole story. GNP is growing, so the ‘real’ economy is growing too. Considering the deleveraging that is going on, it is growing at quite a clip too. Considering also the deflationary impacts of the past budgets, the GNP growth is some performance. Of course, a good chunk of this is down to foreign borrowings – were the state to have to stand on its own income, the picture would be a little different, but currently we don’t. @ ALL btw, for a very educational and interesting overview of the CSO data, via a 15min video presentation/discussion, can i direct you over to Seamus Coffey’s blog where he goes through the latest CSO data and explains the figures and dynamics that we see in it. Excellent stuff. http://economic-incentives.blogspot.com/2011/09/quarterly-national-accounts.html#more I wonder how many commentators here have actually read the CSO release. The nominal data (either Table 2, or s.adj. Table 5) show that the economy is still contracting, down year on year. As the chain-linked data show the economy expanding, this can only be because of deflation. This makes all debts and debt-servicing costs larger in real terms, including those of the government, but also of the household and corporate sectors. Inventories also rose sharply in Q2 despite falling household and government consumption. This is not often a good sign. @ Michael Neither Table 2 or Table 5 show “that the economy is still contracting”; they show the opposite. It is true that Y-o-Y, quarterly GDP and GNP are lower, but a comparison to a year ago does not necessarily give an insight into the direction of the economy now. A turning point could have occurred in the meantime. From the second quarter of 2010 nominal GDP declined until the end of the year but has been increasing in 2011. With the preliminary data currently available the end of 2010 seems to have been a turning point for GDP. Nominal GNP was falling from the middle of 2010 but it also rose in the latest figures for Q2 2011. It is hard to argue “that the economy is still contracting” when both the figures you cite increased Q-o-Q. From Table 2 nominal GDP rose by 3.5% on the quarter (nominal GNP rose 3.2%). From Table 5 seasonally adjusted nominal GDP rose 1.3% on the quarter (seasonally adjusted GNP rose 0.8%). All of the numbers are higher than they were in the previous quarter. The economy may contract again, and the third quarter of 2011 may be (yet another) turning point. We just don’t know, but the current figures show an economy expanding not contracting. The expansion shown in Tables 2 and 5 is based on current prices so it has little to do with price deflation. The real increases are less than the nominal increases so it indicates that rising prices were used to create the real figures. The unadjusted 3.5% rise in nominal GDP from Table 2 corresponds to a 1.6% rise in real GDP in Table 5. If price deflation was used surely that real rise would be greater than the nominal increase. These are just one observation and should not be considered conclusive, but we should accept them for what they are – the economy expanded in the second quarter. @Seamus Coffey Not only did the economy expand in the last quarter, but the domestic economy contracted less than first thought in Q1. With wages no longer contracting, it is not deflation that is a problem. As wages are not increasing, inflation is what is cutting into disposable income. Mind you, that doesn’t fit the meme of the deflationary fiscal contraction… Seamus I know of no prolonged economic recession, or stagnation where the quarterly data falls uninterruptedly every quarter. The key issues are the trend and the relationship to the prior peak. The trend is clear. Confining ourselves the to s.adj. data on Table 5, if we take the combined GDP or GNP totals for H1, they are both lower than H1 2010. The real rise recorded elsewhere in the CSO data is simply the effects of deflation. The ‘turning-point in the meantime’ you identify is very recent. In the case of nominal GDP it is still lower than it was in Q3 2010, while nominal GNP is lower now than it was in Q4 2010. The turning-point argument rests on a very recent inflection-point. The are two problems with this. The first is that there were two consecutive quarters of nominal GP growth in H1 2010, when we turned a previous corner only for the contraction to resume in H2. There were also 2 quarters of nominal GNP growth in mid-2010, and renwed contraction followed. It is perfectly possible for growth to be recorded when inventories rise or imports fall. If other categories of consumption continue to fall, this is not normally a precursor to robust growth. In fact both inventories rose sharply and imports fell in Q2. Perhaps rising inventories are a sign of increased and well-placed business confidence – despite the trend decline in both household and govt consumpton. Maybe the slight increase in GFCF won’t give way to a sharp decline in Q3, as it has done in the two previous years. But if this ‘turning-point’ can give way to another negative turning-point in Q3 as you concede, does it really merit the description of turning-point at all? Surucu Kursu… […]The Irish Economy » Blog Archive » Latest CSO Data[…]… Comments are closed.