IBEC 'encouraged' by rise in industrial production
IBEC have said that it was encouraging to see the manufacturing sector recovery gain further momentum in the final months of 2010.
It also said that the increase in consumer price index was largely as expected and was mainly driven by commodity price hikes and higher health charges.
IBEC chief economist Fergal O'Brien said: "The rate of inflation will increase a bit further over the coming months before subsiding somewhat in the second half of the year. Commodity prices have continued to edge higher in recent months and this is evident in the latest figures: food prices were up 0.3% in the month, while fuel prices rose by a further 2%. Petrol prices have now increased by 15% over the past year and diesel prices are up 18%.
"It is worrying to see public sector related costs adding so much to inflation in January - hospital services jumped by 10% while consumers were also hit by a 1.6% rise in health insurance - with more increases to come over the coming months. Despite the return to inflation, average prices remain 6% below where they were prior to the economic crisis.
Commenting on new CSO industrial production data, Mr O'Brien said: "Despite poor weather conditions, manufacturing output expanded strongly in December, rising by 18.3% on the corresponding month in 2009. Firms were able to make up for lost time and the impact on production volumes was limited.
"The modern high-tech sectors expanded by 23.1%, but the acceleration in traditional sector output to 7.9%, the highest since August 2007, was particularly welcome. The manufacturing PMI in January was at its strongest level since April 2000, indicating that the strong performance of the industrial sector will continue into 2011.
"Overall, 2010 was one of strong recovery for Irish manufacturing, reflected both in the improving trend in output and strong export figures. Manufacturing output grew by 8.4% during 2010, with the modern sector expanding by 11% and the traditional sector recovering by 2%."
