26/8/2012: ECB letter - what Minister Noonan's latest conversion tells us about the State

There is anew circus in downtown Dublin and this time around it is the courtesy of the old culprit the infamous ECB letter from Trichet to the late Minister for Finance, Brian Lenihan.

The letter was (again, for the n-th time) brought to our attention by Professor Karl Whelan in his forbes.com post (here) and the issue championed by Gavin Sheridan of gavinsblog and http://www.thestory.ie. This time around the mention raised some noises from the Minister for Finance Michael Noonan (here).

We can only speculate as to Minister Noonan's motives for promising, at last, to publish this letter. My suspicion is two-fold:

1. Nothing penetrates the skulls of Irish establishment other than bad publicity in international press. Frankly put, years of criticising Governments policies have taught me several lessons. One of them is that an article in the Irish Times causes an 'outrage' and 'indignant' denials. An article in the likes of Forbes or Wall Street Journal or FT causes real 'concerns'. Ireland's elites are incapable of reassessing their adopted positions (on policy or transparency or anything else) unless their silence can damage their standing with the MNCs and within international community.
2. We might be getting a pre-management of what is likely to be a fizzling-out of the Government efforts to deliver on the 'seismic' June 29 EU summit commitment 'to re-examine' Irish banks bailouts.

The above are speculative arguments, solely to raise some questions, but the change in Minister Noonan's rhetoric is indeed rather dramatic. 

Italy received a similar letter and it was leaked to the press back in August 2011 (see here). The world didn't end and Italian economy did not collapse. ATMs still function. The ECB sent a similar (in nature) letter to Spain, and that letter remains undisclosed to the public. Minister Noonan could, in my view, make the letter fully public at any moment in time by simply ordering it to be published. All that stands between Minister Noonan's stated intention of publishing the letter and the actual publication of the letter is... err... Minister Noonan's will.

Of course, for historical reasons and for the sake of transparency, the ECB letter is important. As an aid to securing Ireland's future, it is relevant only in so far as it raises real questions relating to the competence of our permanent 'elite' - the Government advisers and the senior civil servants. 

What concerns me most is the mythology of the nation that will have to be destroyed if the letter really does contain a threat from the ECB of the withdrawal of ELA or funding for Irish banks in response to any unilateral action taken against the banks bondholders. The mythology at risk here is that the then Minister for Finance, and his advisers and the Department, plus the Central Bank and other authorities of the Irish State actually acted within the full extent of their capabilities in protecting the interest of the taxpayers and the State.

Think about it: can such a threat from the ECB be credible? 

The alleged threat contained in the ECB letter is that the ECB were to turn off the liquidity taps to Irish banking system because imposing haircuts on banks bondholders would have risked a full contagion from Irish banks to the Euro system or its financial system at large. Suppose this is so. Surely, turning off the liquidity tap in such a case would have risked a full-blown and immediate collapse of the entire Irish banking system (as opposed to the partial insolvency triggered in some banks by bondholders actions) - the very same system that is, allegedly, so vital to the European banking system that even a handful of disgruntled bondholders relating to Irish banks could trigger a run on the European banking. 

This is (a) highly alogical, and (b) unlikely to have passed the ECB council vote.

Worse than that: such a threat would have forced Ireland to exit the Euro system and monetize the banking system with own currency - an event that would have threatened much more than just the stability of the Euro area banking system, but the existence of the Euro as a currency.

Thus, if the threat contained in the letter is that of the liquidity starvation, such a threat could not have been credible when it was made. Which implies that either the letter contains some other threat, or that the Government at the time was simply out of its depth in dealing with the crisis.Setting aside, for now, the possibility of the former, the latter, if true raises another set of questions: Where were the Government advisers (especially the ones who are today still in the position of considerable power and authority)? Where were the senior civil servants (pretty much all of whom are still in the positions of considerable power and authority)? 

You see, incompetence of the Government ends with the Government replacement by the voters. Politicians, in the end are accountable. 

Incompetence of the permanent elite (senior civil servants and advisers in charge of steering the Minister response) continues as long as they remain in the positions of authority and then, beyond, into their handsomely rewarded retirement. The former aspect of the letter is stuff for historians, the latter is for us.

25/8/2012: August 2012 MOU - a base PR touch with little substance

The new installment of the Comics, known as Ireland's MOU (Memorandum of Understanding) with Troika was quietly released yesterday, without so much as giving the media an embargoed copy or a prior notice of forthcoming release (see The Irish Times article on this).

The document was (once again) released in a pdf format that is unmanageable in the Professional version of the software, cannot be searched, cannot be easily scrolled through and loads partially possibly due to non-optimized version saved by the Department of Finance. In simple terms - the release was antediluvian in presentation - a veritable embarrassment to the Government that keeps talking about modernization in the Civil Service etc.

In terms of content, there are some comical moments of  a truly priceless nature. In the week that saw publication of the Central Bank report on Irish banks lending to the SMEs, identifying Ireland as the second worst performer in this area after Greece, the MOU opens up with the following statement, concerning targets delivery by the end of Q3 2012 [emphasis mine, throughout]:
"The authorities... will assess banks' deleveraging ... in line with 2011 Financial Measures Programme. Fire sales of assets will be avoided, as will any excessive deleveraging of core portfolios, so as not to impair the flow of credit to the domestic economy."

Furthermore, in light of the abysmal Q2 2012 data for mortgages arrears and defaults, also released this week, the MOU states: "The authorities will provide staff of the EU Commission, the IMF, and the ECB with their assessment of banks' performance with the work-out of their non-performing mortgage portfolios in accordance with the agreed key performance indicators." One wonders if the 'assessment' of performance will reference the fact that more than 1/2 of all restructured mortgages are now back in arrears (see details here).


As far as a pertinent or substantive part of the 'Financial Sector Reforms', the MOU lists (should we be surprised) only one real tangible measure to be delivered on: "The authorities will also adopt regulations underpinning the Resolution Fund Levy to recoup Exchequer resources provided for the resolution of troubled credit unions." Congratulations to the Government on consistent continuation of the core 'reforms' policy in all spheres of the Irish economy - identification of new taxes/levies/charges to milk the taxpayers. Incidentally, the Levy was not mentioned under the respective heading in MOU from May 2012.


Structural reforms section of the MOU is worth some attention, as always, if only for the complete waffle it contains. Promises to monitor, to report are thick on the paper, but details of any actual reforms are thin. As always, the MOU is really about managing PR for Ireland-Troika relations, not for actual reporting (which takes place much more via ongoing monitoring and Troika reviews).


On personal debt issues, "the authorities will ensure that a programme to facilitate access by distressed borrowers to professional advisory services, funded by banks, will be operational". Of course, not a word on such services needing to be independent of banks in the front section of the MOU, although the said reference is contained in the latter sections. In addition, one has to wonder - the scheme is not operational now and how it can be made operational between last Friday and next Thursday is anybody's guess.


On social 'support' scheme efficiencies (aka social welfare): the set of reporting targets is identical to that provided in May 2012 and majority of these targets remain unaddressed, judging by the CSO data. For example, the MOU promises progress on "Reducing the average duration of staying on the live register." The said duration is continuing to increase. MOU claims to report progress on "Increasing the fraction of vacancies filled off the live register", but there is still no actual data on this reported by the CSO - the official source for Live Register stats. "Increasing the number of unemployed referred to training courses and employment supports" in reality, per latest CSO data, is met with decreasing numbers of those in state training schemes. As per "Providing data on live register broken down by continuous duration, and probability of exit by various durations"... well, the former is normally supplied by the CSO (so no need for MOU-linked reporting) and the latter... oh, may be the Department of Finance can point me to where that has been supplied. Data 'per exit destination' from the unemployment supports - promised by the MOU - is still nowhere to be seen, as far as I know.

Since May 2012, the state was tasked to provide simple stats on evaluation of activation and training policies. As far as I know, this still has not been fully complied with.


When it comes to fiscal 'reforms' there are no new targets for either numerical tax increases (still set at "at least €1.25bn") nor for voted expenditure "consolidation measures" (still at €2.25 bn). Some folks have suggested that the numbers represent scaremongering by the Government in advance of the Budget 2013, but I must disagree - the targets were set ages ago and so far these have not changed.

There is an interesting change of course on the state asset disposals procedures for Q4 2012 MOU compliance plan, which now reads "Government will complete, if necessary, relevant regulatory, legislative, corporate governance and financial reforms required to bring to the point of sale the assets it has identified for disposal". The new bit here is the insertion of "if necessary" clause in place of March 2012 version which read "...will complete the identified regulatory..." In other words, the Government is seemingly lowering the bar for compliance with normal disposal practices.


Despite having more staff per supervised institution than any other Central Bank in the developed world, the Irish Central Bank gets 5 days extension on regular submissions of two core datasets: set C3 and C7 relating to detailed financial and regulatory information on domestic individual Irish banks etc, and deleveraging reports. Surely, not a good sign for the CBofI productivity...


Some of the best examples of the Government spin and distortion of reality are, as always, found in the Attachment 1. Memorandum of economic and Financial Policies.

Take these for examples:

• The Government reports the return of economy to growth in 2011, but, given this is now August, mentions nothing about the economic decline in Q1 2012 or about the economic conditions since.
• The Government reports a current account surplus in reference to GNP, but does not reference growth rates in GNP terms.
• The Government states that "domestic demand continues to decline - albeit at a slowing pace - owing to continuing household balance sheet repair and the still weak labour market." It fails to include in the causes of the domestic demand decline Government-own taxation policies and inflationary pressures from state-controlled sectors. That said, the Government does admit that 'administered price increases' have lifted HICP to 1.8% in H1 2012.
• The MOU states that "weak trading partner growth dampening export demand eve as further competitiveness improvements cushion this effect". This statement is pure spin, as the declines in our exports are registered in the pharma and related organic chemicals sectors where not the demand weakness, but patents expiry is the core driver. Our competitiveness gains have been flattening out or declining on productivity side, but are improving on forex side.

The MOU now explicitly references only two targets for 'addressing banks-related debts' legacy - Anglo promo notes and PTSB, which has been flagged as a scaling back of Government expectations post June 29 summit announcement already, so no surprise there.

Aside from the above, I can spot no significant changes in the current MOU compared to May 2012 MOU. The same applies to small / marginal changes in the technical MOU. Here is an example where the larger scale changes can be found (although even these are very insignificant):

24/8/2012: Perverse logic of Berlin?

An interesting article in the Irish Times today (link) quoting Germany's Fin Min on Irish debt-relief proposals, saying that Ireland's "massive" reform progress should not be compromised by the country efforts to gain relief on banks-related sovereign debts. From the Irish Times: "We cannot do anything that generates new uncertainty on the financial markets and lose trust, which Ireland is just at the point of winning back."

While we should be careful not to read too deeply into Mr Schauble's comments - which can be interpreted in a number of ways - the logic of the German Fin Min is worrisome.

Ireland has raised exceedingly expensive funds in recent bonds and T-bills auctions with explicit desire to test the markets appetite for Irish paper. In many ways, the relative success of these auctions was underwritten by external dynamics in debt markets, but also by the markets perception of Irish progress on reforms and by the markets expectation of the decline in future debt liabilities related to the banks debt deal. In other words, Ireland has paid a hefty price so far for starting the process of recovering some market access for the Sovereign. This is a net positive, albeit severely limited by the cost of funding raised.

Hence, we have a bizarre situation:

1. a member state in the Euro zone is undertaking all the right (from the markets & policymakers point of view) steps, achieving measurable progress, and generally behaving like the best pupil in the class, yet 
2. German leadership - the proxy for the Euro zone leadership - is unwilling to help that state in its efforts.

Surely, if Germany really wants stabilization and recovery in Europe's periphery, writing down €30 billion of promissory notes would be the cheapest approach to take toward reinforcing Irish efforts to deliver on the programme. Since the funds are fully linked to the ELA, this would imply absolutely no negative effect on private markets expectations. If anything, it will signal Europe's willingness to use the monetary system to support the process of resolving banking insolvency-induced stress on the sovereigns. Reduction in Ireland's debt burden in this context will be non-trivial and will help restore bonds markets confidence in both Ireland and the Euro zone system.

The bond markets operate - basically speaking - at the following level of logic:

• If an action reduces supply of debt, ceteris paribus, price of debt goes up, yields go down. Restructuring Irish Government's banks-linked debt will act to deliver exactly this effect.
• If an action reduces future potential haircuts that can expected by the private sector holders of debt in the event of prababilistic restructuring, price of debt goes up and yields go down, since future expected losses on privately held debt will be lower. Restructuring officially (Euro system) held ELA will deliver exactly this.
• If an action improves debt sustainability of the sovereign, yields will go down. Restructuring ELA will do exactly this.
• If an action does not introduce new moral hazard into future funding incentives for the sovereign, longer-term yields will be lower. By restructuring ELA - which has nothing to do with Irish exchequer past poor performance or policy choices, but has to do with rescuing risk-taking behaviour of the foreign funders of the Irish banks - the Euro zone can achieve exactly such long-term consistent repricing of Irish debt.
• If an action reduces the need for future funding, expected future bonds issuance falls and with it, the yields will fall. By removing the need to fund future repayments of promissory notes, the EU can achieve exactly this effect.
• If an action improves economic growth prospects for the nation, thus lowering risks associated with future tax revenues growth, deficits and debt financing, it will reduce yields on Government debt. This, again, is something that a restructuring of ELA/promissory notes will achieve.

Any way you spin it, aggressively restructuring the promissory notes and the ELA will deliver the benefits for the Irish exchequer. If, as Mr Schauble clearly believes, there is a case for contagion of risks across the peripheral sovereigns, such benefits will also be positively felt by other peripheral economies. In addition, such benefits will also help give some much needed credibility to the Euro zone overall policy efforts in dealing with the crisis.

23/8/2012: Mortgages Arrears in Ireland - Q2 2012

At last we have the data for Q2 2012 mortgages arrears in Ireland, and these are ugly. That's right, folks - ugly.

Let's keep in mind: Irish average household size is at 2.73 persons per household as per Census 2011.

Top numbers:

• Total number of outstanding mortgages in the state stood at 761,533 in Q2 2012, down 0.34% q/q and down 2.03% y/y. In the previous quarter (Q1 2012) the rate of mortgages decline was 0.63% q/q and 2.34% y/y. This suggests a slowdown in mortgages repayments (deleveraging) in the economy, despite the Government claims to the economic stabilization (something that would be consistent with accelerating deleveraging).
• Outstanding balances of mortgages are at €111.99 billion in Q2 2012, a decline of 0.62% q/q and 2.69% y/y. Again, compared with Q1 2012, there is a slowdown in deleveraging (-0.70% q/q and -2.82% y/y in Q1 2012).
• Of all mortgages outstanding, 45,165 mortgages or 5.93% (totaling €7.53 billion or 6.73% of all balances) were in arrears less than 90 days. In Q1 2012 the number was 46,284. This is a mew category of reporting and Central Bank deserves credit for continuing to improve data disclosure to the public.
• Of all mortgages outstanding, 17,533 (2.3%) of mortgages were in arrears between 91 and 180 days, with mortgage balance of €3.13 billion (2.79%). Good news, there has been a deecrease q/q in these mortgages - down 3.52% (in Q1 2012 there was a rise of 2.06% in this category) in number of accounts and a drop of 5.73% (against a rise of 1.32% in Q1) in mortgages volumes. Year on year, this category of mortgages arrears is up 11.64 in Q2 2012 which marks a slowdown from 27.5% rise y/y in Q1.
• However, the decline in the 91-180 days category of mortgages in arrears (-640 mortgages q/q) is almost ten-fold smaller than the rise in the arreas 180-days and over category (up 6,261 q/q in Q2). In other words, the decline in mortgages in arrears 91-180 days is explained fully by the rise of mortgages in arrears over 180 days.
• Number of mortgages in arrears in excess of 180 days now stands at a massive 65,698, up 10.53% q/q in Q2 2012 (in Q1 2012 the same rate of increase was 11.89%) and up 64.1% y/y. These mortgages amount to €13.35 billion - which represents a 10.64% q/q increase and a 67.22% increase y/y.
• Using old methodology, total arrears over 90 days now amount to 83,251 mortgages (up 7.24% q/q and 49.3% y/y), with a balance of €16.48 billion (up 7.11% q/q and 52.1% y/y). 
• Thus, currently, 10.93% of all mortgages in Ireland are in arrears 90 days and more, and these amount to 14.72% of total mortgages balances. For comparison, in Q2 2011 these percentages were 7.17% and 9.42% respectively.
• Using newly available data on mortgages in arrears less than 90 days, total number of mortgages in arrears in Ireland is 128,416 (16.86% of all mortgages outstanding) and these amount to €24.01 billion (21.44% of all outstanding balances).
• Now, put the above number in perspective - that is around 350,576 people (actually more, since mortgages arrears are likely to impact younger and larger households over retired and smaller households) in this country who are missing payments on their mortgages.
• In Q2 2012 there were 84,941 restructured mortgages (up 6.56% q/q and 21.63% y/y). The rate of restructuring has declined from Q1 2011 when q/q there was a rise of 7.17% and y/y there was a rise of 26.66%.
• Of restructured mortgages, 47.35% were not in arrears. Percentage of restructured mortgages in arrears has fallen from 56.41% in Q2 2011 and from 48.50% in Q1 2012. Which, of course, means that more an more restructured mortgages are falling back into arrears, implying that the restructuring solutions do not work for at least 53% of mortgages to which they were applied.
• As of the end of Q2 2012, there were total of 169,598 mortgages (22.27% of all mortgages outstanding) that were at risk (in arrears, restructured and not in arrears, and subject to repossessions). This represents (using average household size) 463,003 persons.

Charts to illustrate above trends:

At this stage, there is no point of denying that all restructuring and other 'solutions' deployed by the banks and designed by the Government are not working. The mortgages crisis is raging on. When you look at the third chart above, even using old definition of mortgages at risk (>90 days arrears), the trend up is linear, implying a constant rise in mortgages risk. Even abstracting away from the possible effects of the new insolvencies legislation on mortgages defaults, the trend above suggests that by Q1 2013 we will be close to 150,000 mortgages at risk (using in arrears more than 90 days metric). This would push overall mortgages at risk to beyond 200,000. More than half a million Irish people will be living in households at risk of falling behind on their mortgages repayments. The question I would like to ask of our 'leaders' is "Then, what?"

23/8/2012: More time for Greece is not an asnwer

As Greek PM, Samaras, heads for talks with Angela Merkel this Friday, here's why 2 more years won't work for Greece: link here.

22/8/2012: Charting Russian Reserves rise, and fall, and rise again

A mighty nice chart courtesy of FRED database, showing the recovery in Russian state reserves (ex-gold) following marking down and deficit financing during the crisis.

In 1998-1999 reserves stood at a monthly average of USD8.73 billion, by their peak in 2008 the monthly average was USD507.0 billion. In the first 6 months of 2012 the reserves averaged USD466 billion, which is only 8.1% below their peak year levels. At the crisi trough, the reserves were down to USD368 billion.

22/8/2012: Globe & Mail: The Good, the Bad & the Ugly

My tongue-in-cheek piece for The Globe & Mail on Euro area crisis: here.

20/8/2012: Hungary - a country that can't?..

An interesting blogpost by Professor Steve Hanke on Hungarian economy's adventures in the crisis land.

Here's another look at Hungary (all data is via IMF WEO). Green boxes show ranges of values required for Hungary to effectively converge in economic development with top EU12 states and those that are consistent with long-term sustainability of public finances.

Fron the first chart it is clear that Hungary did well during the period from 1997 through 2006 in terms of real economic growth, but severely underperformed in terms of external balances. In fact, for the period 1995-2017 (incorporating IMF latest forecasts) Hungary operates within its means (in terms of current account balance) in only 4 years.

While current account deficit remained steady at worse than -7.0% of GDP in 1998-2008, little of this relates to investment supports. In fact, current account deficits vastly exceed the portion of the economic investment not financed by savings.

Per chart above, it is also clear that Hungarian investment has declined precipitously, as a share of GDP, from the peak 27.65% in 1998 to 23.54% in 2008 and fell to around 18% from 2012 on. Meanwhile, savings too trended down over the period 1995 through 2017. The economy is becoming less and less capable of generating investment-driven growth (and that is ignoring the issues of credit supply in the banking system etc).

Hungary's Government debt was relatively benign, compared to many european counterparts during the period of 1997-2006. However, the metric used (debt around 60% of GDP) ignores the reality of an economy that is still in catching up with the more advanced European states (including some post-transition economies, such as Czech Republic and Slovenia) in terms of income per capita and other macroeconomic parameters. Such catching up can only be aided by lower debt to GDP ratios and more investment.

In line with external deficits highlighted above, Hungary has run some extremely severe imbalances on both structural government deficit and net government borrowing (ordinary deficit) sides, as shown in the chart below. In terms of government deficit, Hungary was in the red, on average by 3.48% of GDP in the period pre-accession to the EU. Between 2001 and 2007 the deficit averaged massive 6.92% annually, declining to 2.3% of GDP in 2008-2012. The benign level of current deficit (2012 expected deficit of 3% of GDP comes on top of surplus of 3.96% in 2011) is only highlighting the fact that short-term corrections are no substitute for longer-term prudence. Between 1995 and 2012, Hungarian Government was operating within 3% deficit criterion for only 2 years.

Cumulated, the twin current and government deficits from 2000 on through 2012 are severe:

All of this suggests that Hungary suffers (at 80.45% of GDP in 2011) from a classic debt overhang problem exacerbated by the long-term poor performing fiscal deficits and current account dynamics. That these effects should be felt even at the level of debt traditionally considered to be relatively benign (Hungary's 5-year average Government debt through 2012 stands at 78% of GDP compared to 62% for the 5 year period between 2003 and 2007) is probably best explained by the country relatively lower ability to sustain even these levels of debt.

20/8/2012: ECB yield cap - more questions than answers?

So ECB is discussing putting an upper bound on euro area yields. One question: what 'bounds'?

Here's a chart (courtesy of http://rwer.wordpress.com/2012/08/19/graph-of-interest-rates-1995-to-2011-for-german-france-italy-spain-portugal-ireland-and-greece/ ) showing interest rates 1995-2011 for a number of euro area states.

Should the 'ceiling' be set at Greek, Italian, Spanish and Portuguese (GISP) yields pre-1995 (around 10% or above) or German, Irish and French (GIF) yields pre-1995 (around 6.0%) or 1999-2008 average (of ca 4.2%) or what? What should be a benchmark? The delusion of the euro turning ECB-targeted gospel or the (already optimistic) pre-euro rates reality? And can euro area finances be sustained at even around 6% yields?

After all, these are hardly trivial questions. Yields must reflect fiscal and monetary realities. Setting an artificial ceiling on them by definition means evading that reality (otherwise constraint will not bind). Does Italian reality justify 6% yield target? Does French reality do same? Is the current level of Greek yields reflective of the reversion to the fundamentals-warranted long-term historical mean (perhaps with some moderate overshooting in the short run) or should Greece really be treated distinctly from Germany, France, and even Italy?

Updated: more questions:

Suppose ECB does effectively cap bond yields. Then what? Will this restore growth to the Euro area? No. Deleverage households or corporates? No. Reduce pressure on taxes? Potentially marginally. Increase Gov's capacity to borrow to 'stimulate' economy? No. Reduce pressure on Governments to reform & incentivise more public spending? Yes. Decrease the Sovereign liquidity trap? Maybe. Increase banking sector liquidity trap? Possibly.

So the price of getting better sleep for politicians will be what? Real economy still in deep deleveraging & Governments slipping back into comfort zone of tax-borrow-spend economics? A logical denouement to the failed economic analysis that see sovereign debt crisis as the main source of economic decline in the euro area.

20/8/2012: China's 'This Time It's Different' turn?

Two charts and a table that are really self-explanatory. All via http://macromon.wordpress.com/:

This time, it's clearly very different...

19/8/2012: Gaffe of the week?

An interesting revelation comes the courtesy of one of our Senators: 

"It's very hard work. You have two-and-a-half to three weeks' work in one week. We start at 8 in the morning and don't finish until 5 or 6. That's a lot more work than a day at home."

In other words, Mrs Fidelma Healy Eames (Senator) has found herself working 2.5-3 times the normal week's work load by taking up work lasting from 8 am through 5-6 pm. Let's do the maths: 10 hours day span for working day is 2.5-3 times normal weekly time implies that 'normal' working hours for Mrs Eames are in the region of at most 10/2.5=4 hours. 

But let's give Mrs Eames some benefit of the doubt and suppose that she worked the horrific hours seven days a week with no lunch or other breaks, in which case her work load on her trip to Rwanda and Kenya was running at (7 days x 9 or 10 hours per day) = 63-70 hours per week. If that is 2.5-3 times the normal work load, our Senator undertakes back at home (in Ireland), her statement suggests working week of 21-28 hours per week in Ireland. 

By the way, average paid working hours in Civil Service and Defence sector in Ireland in Q1 2012 stood at 34.6 hours per week. And that is skewed down by part time workers taking lower hours.

18/8/2012: Irish Services Activity June 2012 & Q2 2012

Some interesting stats for Q2 2012 and June on Services sector activity in Ireland from CSO.

Headline stuff:

• The seasonally adjusted monthly services value index declined 1.3% in June 2012 m/m and there was an annual increase of 5.6%.
• Transportation and Storage (+4.6%), Other Services (+0.8%) and Accommodation and Food Service Activities (+0.1%) showed m/m increases in June 2012. 
• Wholesale and Retail Trade (-3.4%), Information and Communication (-2.7%) and Business Services (-0.3%) showed m/m decreases.
• Transportation and Storage (+14.7%), Information and Communication (+13.5%), Other Services (+4.5%) and Wholesale and Retail Trade (+3.2%) showed y/y increases in June 2012 when compared with June 2011. 
• Accommodation and Food Service Activities (-2.0) and Business Services (-0.3%) showed y/y decreases.
• Overall June monthly reading is the second highest in the series (since October 2009) with y/y growth in June at third highest since October 2010

Charts:

And Q2 2012 results (a bit more descriptive) are:

• Overall Services Sector activity is up 2.6% in Q2 2012 compared to Q1 2012 and up 5.2% on Q2 2011 - solid results.
• Wholesale & Retail Trade and repairs of vehicles & motorcycles services index is at 108.4 - up 0.5% q/q and 4/5% y/y, primarily driven by Wholesale Trade services (up 1.2% q/q and 10.7% y/y).
• Information and Communication services index is up 2.2% q/q, and up 11.5% y/y in Q2 2012.
• Business Services up 3.3% q/q, but down 0.5% y/y marking a third consecutive quarter of y/y contractions, albeit at much slower pace than -2.1% recorded in Q1 2012.
• Transportation and Storage services were up 9.2% q/q and up 13.4% y/y in Q2 2012.
• Accommodation and Food services were up 1.5% q/q, but down 2.6% y/y. Q2 2012 marked the fourth consecutive quarter of y/y contractions in the sub-index.
• Other services posted a rise of 4% q/q and 1.6% y/y, breaking the 5 consecutive quarters of y/y declines.

So nicely solid results from the sector, albeit subject to some caveats due to the nature of the data series.