Tuesday, November 6, 2012

6/11/2012: Irish Industrial Production & Turnover: September 2012


There has been a massive, extremely disturbing, albeit alltogether not un-predictable fall off in manufacturing activity in Ireland over September 2012. Here's the CSO statement:

"Production for Manufacturing Industries for September 2012 was 13.9% lower than in August 2012. On an annual basis production for September 2012 decreased by 13.7% when compared with September 2011.

The seasonally adjusted volume of industrial production for Manufacturing Industries for the quarter period July 2012 to September 2012 was 4.5% lower than in the preceding quarter.

The “Modern” Sector, comprising a number of high-technology and chemical sectors, showed a monthly decrease in production for September 2012 of 22.4%. The most significant change was in Basic pharmaceutical products and preparations with a decrease of 35.2%.

There was a decrease of 1.3% in the “Traditional” Sector.

The seasonally adjusted industrial turnover index for Manufacturing Industries decreased by 5.7% in September 2012 when compared with August 2012. On an annual basis turnover decreased by 4.5% when compared with September 2011."

More on underlying dynamics:


  • Volume of Manufacturing output shrunk 13.73% y/y and 13.88% m/m. Compared to September 2007, index reading is down 13.89%. Q3 2012 reading is down 4.8% q/q and down 2.82% y/y.
  • Manufacturing activity (in volume terms) now stands at the levels last seen back in December 2009 and is down 2.6% in 2005 levels.
  • 6mo MA through September 2012 is at 110.78, virtually indistinguishable from 12mo MA of 110.98.
  • Volume index for All Industries is now at 96.8 - the level last seen between November and December 2009. The index is down 12.71% y/y and 12.64% m/m. Q3 2012 reading is down 4.52% q/q and down 3.10% y/y.
  • 6mo MA is now slightly below 12mo MA (108.75 v 109.10).
  • The index is at 3.2% below 2005 levels of activity.



  • Modern Sectors volume of activity index has fallen to 105.0 in September, down 18.03% y/y and 22.45% m/m. Activity has fallen to the lowest level since November-December 2009 and compared to September 2007 the index reading is down 8.96%. 
  • Q3 2012 index is down 5.96% q/q and down 1.60% y/y.
  • 6mo MA (127.07) is identical to 12mo MA.
  • Traditional sectors fall-off was less steep, but the index of volume of production here suffered second consecutive monthly decline. The index is down 5.01% y/y and down 1.30% m/m to reach 83.5 reading, lowest since January 2012. 
  • Traditional sectors volume of production is down 22.53% on September 2007 and down 16.5% on 2005 levels of activity.
  • Q3 2012 reading is 1.33% below Q2 reading and down 6.15% y/y.
  • 6mo MA (84.93) is below 12mo MA (85.4).


As the result of the above changes, the gap between Modern sectors activity (volume) and Traditional sectors activity has narrowed dramatically to 21.5 ppt in September against 50.8 ppt in August.



Turnover data signaled narrower reductions in activity, suggesting that some MNCs have accelerated transfer pricing in light of higher producer price inflation (as signaled by recent PMIs):

  • Manufacturing turnover activity fell to 97 in September, down 4.53% y/y and down 5.73% m/m. 
  • Compared to the same period of 2007, turnover is now down 10.08%.
  • Q3 2012 reading is up 3.70% q/q and up 0.36% y/y - once again due to improved price inflation.

New orders index reading slipped to 97 in September, down 3.96% y/y and down 6.55% m/m. Compared to same period 2007, the new orders activity is down 11.31%. Q3 2012 new orders average activity was up 3.59% q/q and up 1.44% y/y. 6mo MA, nonetheless is almost flat at 99.35 compared to 100.00 for 12mo MA.


Employment indices have slipped across a broad range of sectors in Q1 2012 - the latest for which data is reported. Modern sector employment fell to 63,500 in Q1 2012 against 67,100 in Q4 2011. Chemicals and pharma sector employment actually rose to 43,800 in Q1 2012 against 43,300 in Q4 2011, while Computers, electronic and optical products and equipment employment fell from 23,800 in Q4 2011 to 19,700 in Q1 2012. Overall industrial employment in Ireland fell from 201,200 in Q4 2011 to 192,700 in Q1 2012.

Volumes of industrial production in Basic pharmaceutical products and preparations fell 31.8% in September 2012 y/y and were down 35.2% m/m. In turnover terms, activity was down 23.1% m/m and down 27.5% y/y.

I will blog on this in more detail later tonight, so stay tuned.





Post a Comment