Rise in industrial output points to recovery

Industrial production increased significantly in August, in one of the first signals that international recovery may be starting to benefit the manufacturing sector, writes Cliff Taylor

Manufacturing production in August was 15.3 per cent ahead of August 2002, according to figures from the Central Statistics Office. The "modern" - or high-tech - sectors showed the strongest rise, with production up 17.3 per on August last year, but there was also a sizeable 10.1 per cent jump from the "traditional" sectors, as counted in the CSO data.

The figures show that the seasonally adjusted volume of industrial production in the three-month period June to August 2003 was up 2.4 per cent on the preceding three months.

Production last month exceeded the previous record reached in March of last year. The trend was then downwards for the rest of last year and has been volatile up to July this year, before the strong August recovery.

The monthly increase may reflect the benefit of some recovery in international growth on manufacturing here. However, figures for a number of further months would be needed before judgment could be made on whether this was the start of a sustained recovery trend.

"There is no mistaking the rebound that occurred in August," according to a commentary on the figures published yesterday evening by Davy Stockbrokers.

"While these figures are provisional... it is clear that the acceleration of growth in the US in Q3 had a positive influence on the numbers," the brokers added.

They calculate that in the first eight months of the year industrial production increased 4.5 per cent year-on-year, which can be split into a 5.5 per cent increase for the modern sector - including industries such as software, computers and chemicals - and 1.6 per cent in all other sectors.