National Accounts confirm strong export-led growth
Ibec, the group that represents Irish business, noted today's National Accounts numbers published by the Central Statistics Office. Ibec welcomed the figures for the 1st quarter of the year, which showed remarkable growth on the back of continuing export momentum. This growth, however, is also reflective of a very volatile period with Covid, Brexit and other international dynamics all leading to volatility in the figures. Despite further falls in both personal spending and investment amid the lockdown of the first months of the year, export growth of 5.8% has driven GDP growth of 11.8% year-on-year.
Ibec Chief Economist Gerard Brady said: “Today’s figures are a welcome confirmation that Ireland’s robust export performance is continuing to deliver strong growth despite the impact of the pandemic on our domestic sectors. The figures released today highlight diverging fortunes within the economy, as domestic demand fell by 2.9% over the quarter while exports surged.
“Despite the comparatively poor performance of domestic sectors in the first quarter of the year, there are signs of light on the horizon, with strong VAT returns for March and April indicating the potential for a rapid recovery in consumption. This, in conjunction with positive improvements in employment as sectors reopen, shows an economy well placed to recover post-vaccine rollout.
“However, this rapid growth is not without its own challenges, with data released earlier in the week showing rising earnings and labour costs for those in their jobs since Covid hit. Combined with a take-off in demand amid the economic reopening, the impact on costs and margin compression will need to be monitored closely, as supply struggles to keep up.”