Monday, December 27, 2010

External Trade: Export Improvement Continues

Just before Christmas the CSO published the September External Trade Release which provides full details of our merchandise trade to September with some preliminary details to October.  Here are our total merchandise exports and imports to October. 

Exports and Imports to November 2010

Although both exports and imports fell in the month to October, the  figures do little to belie the perception that Irish goods exports have shown remarkable resilience during the current crisis with imports falling significantly.  In October, in seasonally adjusted terms, exports fell 1.9% and imports fell by 11.2%.

This resulted in a further widening of the trade surplus.

Trade Surplus to November 2010

The seasonally adjusted trade balance for October was a record €4.153 billion.  It should be noted that this increase in the trade balance is a result of the drop in imports rather than an increase in exports.

On the export side the importance of medical and pharmaceutical products remains.  We now have the breakdown of exports by category to September.  Here are medical and pharmaceutical products exports.

Pharmaceutical Exports to September 2010

Exports in this category have increased to an average around €2 billion a month in 2010, up around 66% from the average of €1.2 billion a month seen in 2007.  Medical and pharmaceutical products now make up around one-quarter of total Irish merchandise exports.

Proportion of Exports from Pharmaceuticals

In fact, total exports in NACE Category 5 chemicals are now around €4.5 billion a month and make up nearly 60% of total goods exports from Ireland.  Graphs of the amount and proportion of exports from this category are behind the links.  Here we see the proportion of exports from all ten main NACE categories.  Click graph to enlarge.

Exports by Category Proportions

The dominance of ‘Chemicals and Related Products’ is visibly clear and outside of ‘Food and Live Animals’, ‘Miscellaneous Manufactured Goods’ and ‘Machinery and Transport Equipment’ the remaining categories are largely insignificant.

Next we consider the performance our merchandise exports excluding the high value chemicals sector.

Exports excluding Chemicals to September 2010

Outside of Chemicals, Irish exports dropped markedly during 2007, 2008 and 2009.  The performance of Irish exports in the recession has been masked by the strong performance in the Chemicals category, and in particular in the Medicine and Pharmaceuticals sub-category. 

It must be noted that there has been something of a turnaround in 2010 and in September these exports recorded their highest monthly level since October 2008.   In fact, if we consider the Balance of Trade for all goods except NACE Category 5 Chemical and Related Products we see that the rest of the economy is moving to surplus after a persistent deficit.

Trade Balance excluding Chemicals

Here are the trade balances broken down by the main NACE categories.

Trade Balance by Category

Excluding Chemicals there is only a trade surplus of €127 million.  However this is a turnaround from the deficit of €1.4 billion recorded to the same time last year.  As with the improvement in the overall trade balance the increase in the trade balance excluding chemicals is down to a fall in imports but for 2010 there also has been a general increase in exports.  The following table shows how all export categories have been performing this year.  It is a good news table!

Exports by Category to September

In the first nine months of the year exports are ahead of 2009 levels in all categories except Machinery and Transport Equipment.  For the same period exports are now only 0.5% behind the peak recorded in 2007, though this is mainly due to the 20% increase in the Chemicals and Related Products category in that time.  Most of the other main categories are showing double-digit declines on their 2007 levels.  See table here.

Although several categories are down on their 2007 levels the main drag on Irish exports over the past four years has been the ‘Machinery and Transport Equipment’ category.  Exports in this category have fallen by almost 50%, and are almost €1 billion a month lower than they were at the start of 2007.

Machinery and Transport Equip Exports to September 2010

Although there are several sub-categories in this group most of the decline can be attributed to the collapse in the exports in the ‘Office Machines and Automatic Data Processing Machines’ (i.e. computers) sub-category.  Exports in this category have fallen by almost 65%.

Computer Exports to September 2010

Thursday, December 23, 2010

Retail Sales slip again

Although we are right up to Christmas the CSO are still releasing data.  Today we got the first estimates of the November Retail Sales Index.  The all-business index is showing some stability but as is usual we will focus on the retail sales index excluding the motor trades.

In November the motor trades make up 14% of the index.  Here are the value and volume indices for the remaining 86% since January 2008.  The  most recent trend is down, particularly for the value index.  The gap between the two indices continues to grow, reflecting the deflationary pressures that still persist in many retail sectors and a greater “value for money” drive among consumers.

Ex Motor Trades Index to Nov

The value of sales fell by 0.4% in the month, with volume declining 0.2%.  This index has not shown any sign of increases since April.  The only positive monthly changes recorded since then were in August and they were only just above zero.

Monthly Change Ex Motor Trade Index to Nov

After edging towards positive territory for the past few months the annual changes took a slight dive in November.  By value sales are now 1.9% behind last year with a decline of 0.9% in the volume index.

Annual Change Ex Motor Trade Index to Nov

The retail sales index rose in the early part of the year to April.  However, since then the downward trend has resumed.  In the last six months the value index of retail sales excluding the motor trades is down 4.8% with volume down 2.4%.

The National Accounts might indicate that the economy is growing but this is entirely an export-driven trend.  The domestic economy continues to deteriorate.  The recent inclement weather is likely to further damage retail sales, though shoppers may come out in force in January. 

However, with tax increases and benefit cuts soon to come into force we can expect retail sales to continue to struggle.  In particular, the annual growth rates will deteriorate further as the comparison will be made to the short-lived “turning the corner” momentum of the early months of 2010.

Tuesday, December 21, 2010

Employment and Unemployment

We know that Ireland currently has 299,000 people classified as unemployed by the CSO.  This is an increase of nearly 200,000 since the peak of employment was achieved in the middle of 2007.  However, in the fall from this peak the number of people in employment has fallen by nearly 300,000.

Our unemployment figures understate the destruction of jobs in the economy by almost 100,000.  A lot of people have left the ranks of the employed but have not added to the numbers unemployed.  This gap is substantial.

All Cumulative Changes

This gap have significant consequences.  It gives a lower unemployment rate than might otherwise be the case.  It ‘saves’ the government substantial social welfare payments which it would otherwise have to meet.

Where did these 100,000 people go?

Who’s unemployed

A lot of time is spent looking at unemployment rates, here we just look at the numbers.  According to the latest QNHS there are now 299,000 people unemployed in Ireland.  The decrease in the numbers seen during the short-lived ‘turning the corner’ period at the end of 2010 has been replaced by a consistent increase during 2010.

Total Unemployed

Who are these 299,000 people?

According to the CSO data 248,900 are Irish nationals and 50,100 are non-Irish nationals. 201,500 are male and 97,500 are female.  Since the start of 2007 the number of males unemployed has risen by 233%, with a 160% rise in the number of females unemployed.

Total Unemployed by Gender

If we look at the current figure of 299,00 we can break it down by age as well as gender.

Q3 2010 Unemployment by Age and Gender

Although for both genders the numbers in the younger age categories are the largest, these categories have seen a reduction in the numbers unemployed recently (perhaps as people in these categories return to education or leave the country) while the numbers unemployed are the older age categories is continuing to rise. Click to enlarge.

Numbers Unemployed by Age

Finally, for now here is the region breakdown of the 299,000 unemployed.

Q3 2010 Unemployment by Region

Unemployment and Education

The CSO’s Quarterly National Household Survey can be used to give an insight into the employment performance of the population when divided by educational attainment.  This graph uses the most recent QNHS release which gave data up to Q3 2010.

Unemployment and Education

It is, perhaps, an unsurprising picture.  Unemployment is lowest amongst those who have some form of third-level education; non-degree (9.1%) and degree and above (7.1%).  No other category has an unemployment rate of less than 15%.

There has been some minor shifts in the relative rankings of the categories since the fall from peak employment in late 2007.  The category with the highest unemployment rate is not lower secondary (Junior Certificate) at 23.3%.  This is now worse than unemployment amongst those with  only primary education but this is likely a function of participation rates as well as employment changes.  Participation amongst those with only primary education is 37.8%.

The second switch has seen the unemployment rate of those with a post-Leaving Cert qualification (19.2%) move above the unemployment rate of those who leave education after the Leaving Cert (15.2%).

It would be very useful if we had a breakdown of these educational attainment categories by age as we could examine the employment performance of those who have recently completed their education across the different categories versus those who would have finished their education well before the current crisis.

One break down by age that is provided is the differences between early school leavers and those who continued further in education.  A person is defined as an ‘early school leaver’ of they have a highest educational attainment level of lower secondary (Junior Cert) or below and have not received formal education in the past four weeks.  The CSO provides details of these groups in two age categories; 18-24 years and 25-64 years.  Here are the unemployment rates.

Unemployment and Early School Leavers

The unemployment rate amongst early school leavers in the 18-24 age category was always the highest but is now a staggering 56.5%.  For male early school leavers the rate is 61.6% and 45.7% for female early school leavers.

Those in the 25-64 category who left school early have a lower unemployment rate then those in the 18-24 age category who continued in education to Leaving Cert and beyond.

Public Sector Pay and Pensions

In 2010, central government will have a current voted expenditure total of just under €55 billion.  Based on 2009 figures (and here) about one-half of this will go on current transfers.  The Estimates of Public Services show that the public sector pay and pensions bill for 2010 was forecast to be €18.8 billion.  This is about one-third of current voted expenditure.

This means that of the full amount of current voted expenditure nearly five-sixths or 83% of this is a cash transaction between the government and its residents; the payment of pay and pensions to existing and retired public servants and the transfer of cash and benefits to those in receipt of social protection.

The government is a huge cash circulation machine.  The problem we now face is that the government is handing out almost €20 billion more than it is taking in meaning that the public finances are completely unsustainable.

One area that escaped in the recent budget was the subject of public sector pay.   The public sector pay bill for central government was forecast to be just over €16 billion in 2010.  Wages and salaries paid by local government will add another €3 billion to this.  The public sector pension bill in 2010 will be about €2.8 billion.  The measures announced in the recent budget will reduce this by about €100 million.

Under some vote headings the proportion of gross current expenditure that goes on pay and pensions is immense and is 34.4% for central government as a whole.  The proportions for some of the key individual votes are

  • Garda Síochána – 89.4%
  • Prisons Service – 79.1%
  • Education and Science – 77.2%
  • Defence – 72.5%
  • Health Service Executive – 53.1%

With the Croke Park Agreement protecting public sector numbers and pay rates any cuts/savings/adjustments in current expenditure in these areas will have to come from the remaining portion once pay and pensions have been paid.  This is unlikely to achieve anything like the amounts necessary to restore order to the public finances.

A full table of the 2010 proportion of each vote’s current expenditure that goes on pay and pensions is below the fold.  Click the table to enlarge.

Thursday, December 16, 2010

Q3 National Accounts

The CSO have just published the Q3 2010 release of the National Accounts.  Here is a set of graphs using the updated numbers.  Analysis to follow.

Wednesday, December 15, 2010

Earnings Data

We gave a brief look at the CSO earnings data last week.  Here we will consider the release in more detail.  We will start by looking at average weekly earnings. 

Gross Weekly Earnings

Since the first release of the Earnings, Hours and Employment Costs Survey (EHECS) in Q1 2008 average weekly earnings across the economy have fallen by 2.7%.  There has been a 5.4% fall in the private sector and a 0.2% fall in the public sector (though it should be noted that the public sector figures do not take the Public Sector Pension Levy into account as these are gross figures).    However, if we take the past year this has reversed as year public sector wages have fallen by 4.5% with only a 0.3% drop in private sector average earnings.

These public/private sector details and an analysis by the 15 activity sectors used by the CSO is provided below.  Click the table to enlarge.

Earnings Data

When we look at the breakdown by sector we see that the top sector is Electricity, Water Supply and Waste Management which is now the only sector to have an average weekly wage of more than €1,000 euro and has shown the greatest increase since the start of the survey.  Accommodation and Food Service has remained the bottom category though it did show one of the three largest quarterly changes (shown in green).

In general the rankings of the categories have remained steady.  The only categories to show a change of more than one position are Education (6th to 8th), Administration and Support Services (12th to 14th) which both fell by two positions and Manufacturing (8th to 6th) which rose by two positions.   The biggest fall in weekly earnings has been in the Financial Insurance and Real Estate sector which has seen a fall of 16.4% but it still remains the third ranked sector.

As we have noted before the is only a rough barometer of average weekly earnings as it is simply the aggregate earnings divided by the number of employees.  Thus, in a sector in which a large number of low paid staff are let go this average would increase even if the average earnings of remaining employees were unchanged.  In fact, their earnings could be falling even as the average rate was rising.  So a word of caution is required when interpreting the above table.

What the EHECS is very good for is provided a guide to the level of aggregate earnings in the economy.  This takes account of earnings and the number of employees.  Here is an index of aggregate earnings since the start of the survey.

Index of Aggregate Earnings

Aggregate earnings are down nearly 15% since the start of 2008 and although some moderation in the decline has occurred in 2010, they are still below the 2009 levels. This  goes a long way to explain why Income Tax receipts are performing so poorly this year.

We can break this down to look at the relative performance of earnings in the public  and private sectors. In terms of the changes in average weekly earnings the comparison is  broadly similar (once the pension levy is taken into consideration).  The aggregate earnings comparison is not so similar.

Pub-Priv Index of Aggregate Earnings

Aggregate private sector earnings are down nearly 20% with the equivalent figure for the public sector being a drop of less than 4%.  Public sector earnings were actually ahead of the Q1 2008 levels until the pay cuts introduced in last year’s Budget kicked in at the start of the 2010. 

The pension levy would go some way to narrowing this difference but a significant gap would still exist.  While weekly earnings in the private sector have shown a moderate decline, aggregate earnings have suffered because of huge cuts in employment.  The public sector has seen some reductions in weekly earnings but has been largely insulated from losses in employment.

The EHECS suggests that there has been a 202,100 reduction in the number of employees in the private sector since the start of 2008 – a fall of 15.0%.  In the public sector employee numbers have fallen by 14,900 – a fall of 3.6%.

The following table gives the aggregate earnings indices by sector.  Again click to enlarge.

Earnings Index

Again, the Electricity, Water Supply and Waste Management sector performs best with aggregate earnings up 8.8% since the start of 2008.  Human Health and Social Work is the only other sector to show an increase over the same period.

The Construction sector  has seen aggregate earnings fall by over 55% which is 30 percentage points worse than any other sector.  Reductions of more than 20% have also been recorded for Administration and Support Services (-25.0%), Financial, Insurance and Real Estate (-24.6%), Professional, Scientific and Technical (-21.4%) and Information and Communications (-20.6%).

A table of the employment numbers, which along with the average weekly earnings data, was used to create this indices can be seen here.

Ernst and Glum

Ernst and Young today released a winter forecast of the eurozone economies.  Most of the interest has focussed on their pessimistic forecasts for growth in the Irish economy.  The full report can be read here with the sub-section on Ireland available here.  This is key forecast table extracted from page two of the second linked document.  Click to enlarge.

Ernst and Young Forecasts

Although we are not told we must assume that the growth rates given here are real growth rates.  If we compare these estimates to the current Department of Finance Forecasts we see the gap that exists.

Forecast Comparison

Over the period 2011 to 2014 the DoF predict an average annual real GDP growth rate of 2.7% and with a forecast annual inflation rate of 1.3%, the National Recovery Plan is based around a 2014 nominal GDP level of €183.5 billion.

In stark contrast E&Y have an average annual growth rate of only 0.8% over the same period.  With an average expected inflation rate of 0.0% over the period this implies that E&Y’s forecast of nominal GDP in 2014 is €162.2 billion. 

It is worth noting the nominal GDP in 2007 was €189.4 billion in 2007.  And that this time last year the DoF was forecasting that nominal GDP in 2014 would be €204.8 billion!  Here are the three forecasts.

GDP Forecasts

The importance of nominal GDP is that it is used as the denominator in the debt/GDP ratios that are being imposed on us.  To achieve the 3% budget deficit target by 2014 the original DoF’s figures would have allowed a budget deficit of €6.2 billion.  The revised DoF figures would bring this target down to €5.5 billion, with E&Y’s forecasts only allowing a budget deficit of €4.8 billion.

This might not seem like much of a change but based on E&Y’s forecasts this has to be a achieved on significantly less tax revenue (due to less economic activity) and increased social welfare expenditure (due to more unemployment).  In this environment €15 billion of adjustments may seem like a walk in the park. 

Based on E&Y’s projections it is likely we would need budgetary adjustments of about €25 billion.  So we would need three more Budget’s equivalent to last week’s €6 billion adjustment and the low lying fruit on capital expenditure has already been truly harvested.  Some tough decisions would lie ahead.

Of course, it is likely that E&Y’s forecasts will be wrong. All forecasts are wrong as they have as little idea as we do what the Irish economy will look like in four year’s time.  Like the rest of us they are guessing but they sure have changed their tune.

E&Y produce this eurozone forecast every quarter.  Their autumn report was published on the 30 September last (just 11 weeks ago) and can be read here.  Their table of forecasts on the Irish economy is on page 2.

EY Autumn

This was positively bullish compared to what they’re now saying.  Average GDP growth over the four year’s 2011 to 2014 was forecast to be 3.4%.  This is well ahead of the D0F forecasts released a few weeks later and used in the National Recovery Plan which they now describe as “overly optimistic”! 

They had an average inflation rate forecast of 1.9% for the period, again ahead of the DoF forecasts published a few weeks later, and an average unemployment rate of 11.0% which has now jumped to 15.0%.

In September they provided the following relatively positive conclusion:

Despite the difficulties the Irish economy is still facing in 2010, the outlook for a return to relatively strong rates of GDP growth forecast over the medium term, well above the growth expectations for Greece and Portugal, are still maintained. This is premised on Ireland’s core economic and competitiveness fundamentals and the fiscal measures already in place. Although additional new fiscal measures will be required for 2011 in the December budget.

Now the tune is

The main drag on Irish GDP growth in the next two years will come from domestic demand. Beside the direct negative impact of the fiscal measures, growth will be dampened by a range of related factors that include a large out-migration flow of people (and their skills and spending) and a likely rise in retail interest rates that will impact on consumer spending and housing repossessions. Meanwhile, the large excess supply of housing that may take years to clear will be a significant drag on residential investment. Against
this backdrop, the prospects for business investment are also bleak.

As such, we do not expect the domestic economy to recover until a number of years into the fiscal adjustment cycle, and until after the banking system is restored to health and the housing market returns to some degree of normality.

They have downgraded their growth forecasts because of fiscal measures, outward migration, rising retail interest rates, excess supply of housing and problems in restoring the banking system to health.  Did they not know about these when they made their Autumn forecasts back in September?

Although there has been a huge amount of activity on the economic front in the past two months, the real economy has not gotten any worse.  What we have actually seen is a realisation of how grave the problems the Irish economy face actually are.  This realisation is a good thing.  The economy itself has not suddenly deteriorated to the degree suggested by the E&Y forecasts.  It seems they are buying into the mantra “if you are going to forecast, forecast often”.

Tuesday, December 14, 2010

Back to School?

The Construction Sector has seen the greatest destruction of employment in the ongoing recession.  Employment in this sector peaked at over 270,000 in the middle of 2007 but has now fallen to just 113,000.  The biggest sufferers of this decline are men, and in particular young men.

When construction output was at its peak there was 160,000 males aged between 15 and 24 in employment across the whole economy.  The most recent figures show that there are now just over 80,000 males in this age category in employment.  The number of unemployed males in this age category has ‘only’ increased from just under 20,000 to nearly 59,000.  Of course, these cohorts are not suitable for a direct comparison as the 2010 cohort of 15 to 24 year olds will be a much different group to those who were in the same age group in 2007.

One impact of the demise of the construction sector has been the relative increase in the attractiveness of education to males as a result of the decline in their employment and earnings potential. 

Numbers of Students

After declining steadily relative to females during the construction-fuelled Celtic Tiger II phase, the number of males aged over 15 in education has been rising since 2007.  This can be readily seen if we look at the ratio of male to female students.

Male-Female Student Ratio

We can see that at one stage there were only 85 male students aged over 15 for every 100 female students.  Now the numbers are close to parity.

One useful comparison we can make between the 2007 and 2010 groups is the Labour Force Participation Rate. 

Male 15-24 Participation Rate

Labour force participation has fallen from around 60% four years ago to 45% now.  Even with this increased enrolment in education and ensuing drop in labour force participation the collapse in employment for young males has still seen extraordinary unemployment rates recorded.

Male 15-24 Unemployment Rates

The unemployment rate is over 30% among 20 to 24 year old males and is over 40% among 15 to 19 year old males who are in the labour force.   We are in the midst of a major unemployment crisis but look at how moderate the increases in the overall rate seem when compared to the increases in the unemployment rate among males aged under 24.

It would be useful to see targeted suggestions to tackle this problem rather than the usual platitudes we get about “solving the jobs crisis”.  For a start it would help if there was a greater degree of understanding of the problem we face.  And 35% unemployment among young males is a serious problem that will not be solved by hoping they all go back to school.

Sunday, December 12, 2010

Composition of the Labour Force

We can get some useful numbers from the QNHS on the composition of the labour force.  Here we will look at the nationality of workers in the Irish labour force.  Click all graphs to enlarge.

The number of non-Irish nationals in the labour force peaked at 366,500 in the final quarter of 2007.  Since then it has declined and by the third quarter of 2010 was down to 276,600, though this decline has eased considerably over the last three quarters.

Over the same period the number of non-Irish National employees has fallen by 119,400 while the number of unemployed non-Irish Nationals has only increased by 29,400.  Most of the non-Irish Nationals who have lost their job have also left the labour force.  By extension we can assume that they have left the country. 

Non-Nationals Total

Since Q4 2007 there has been a 167,900 fall in employment among Irish nationals.  During the same period the number of Irish nationals classified as unemployed has risen by 168,600.

The percent of the labour force comprised of non-Irish nationals has fallen from nearly 16.5% at the end of 2007 to 12.8% now, a level last seen at the beginning of 2006.

Non-Nationals Percent

Most of this decrease can be accounted for with workers from the EU Accession States leaving the workforce (country), though there was an increase in workers from these countries in the last quarter.  The number of workers from outside the EU has also declined with only slight decreases in the number of UK and EU15 (excluding UK and Ireland) workers in the labour force.

Origin of Non-Nationals

There has been a consistent, though small, difference in the unemployment rates of Irish and non-Irish nationals.  This gap has increased in recent quarters.  For the third quarter of 2010 unemployment among Irish workers was 13.3% and was 18.1% for non-Irish nationals.

Unemployment Rates by Nationality

Workers from the EU15 (excluding UK and Ireland) have the lowest unemployment rate though this did jump from under 7% in Q2 to over 11% in Q3.  A tad under 20% of workers from the EU Accession States are now out of work.

Unemployment Rates by Origin

The QNHS also provide data on employment by sector.  Nearly 62% of all non-Irish national workers are employed in just four sectors; Industry (17.8% of non-Irish national employees), Retail, Wholesale and the Motor Trades (16.8%), Accommodation and Food Service (14.8%) and Health (12.5%).

Numbers employed by sector

The next figure gives the percent of non-Irish employees in each sector.  This ranges from 20.7% in the Accommodation and Food Service Sector, 16.7% in Industry to 4.9% in Education and just 1.2% in Public Administration and Defence.

Percent non-Irish by sector

We can also consider the change by sector since the peak level of employment seen in 2007 Q4.  The numbers of non-Irish Nationals employed has fallen in all 14 NACE categories reported by the CSO. 

Change in Non-National Employment

The largest falls have been in Construction and Retail, Wholesale and the Motor Trades.  It is also useful to look at the proportionate reduction  in the numbers of non-Irish nationals employed by sector.  There has been a nearly 80% reduction in the number of non-Irish nationals employed in the Construction sector since Q4 2007.

Percentage Change in Non-National Employment

The smallest proportionate decrease in the number of non-Irish nationals employed has been seen in the health sector with a fall of 11.3%. 

If we look at employment among Irish nationals we see that employment levels have actually increased in six sectors.  These are Accommodation and Food Service, Information and Communications, Public Administration and Defence, Education, Health and Other.  The following graph combines the previous one with changes in employment among non-Irish nationals with the equivalent numbers for Irish nationals.

Percentage Change in Employment by Nationality

The only sector where there has been a worse proportionate change among Irish employees is the Agriculture, Forestry and Fisheries sector. 

Friday, December 10, 2010

Turning another corner?

And not a good one.

Quarterly Change in Employment

The Two Irelands

The release of the Q3 QNHS from the CSO allows us to update this post.  Here is the clincher.

Numbers Employed

The halves of the Irish economy continued in an apparent happy co-existence until the middle of 2007.  Since then the performance could not be more different.  One has survived the current crisis relatively unscathed in terms of numbers employed.  The other has shed nearly 300,000 jobs.

The employment gap between these halves of the Irish economy was just 26,100 in Q1 2008.  By Q3 2010 this gap was 309,700.  The Irish economy has seen employment fall by almost 300,000 and 98% has been seen in just one half of the economy.

Here we present a breakdown of the sectors that form this halves of the Irish economy.  Data from the Earnings, Hours and Labour Costs Survey released today by the CSO is also presented.

Two Irish Economies

Core Deflation continues

The headline figure from the CSO’s November CPI release is that annual inflation is now running at +0.6% and has been positive for that past four months. 
However, ignoring mortgage interest and energy products, the remaining 85% of the index is continuing to exhibit annual deflation.
Core Inflation November
Core deflation did ease slight in November but was still running at –1.33% in November, a slightly decreasee on the –1.42% recorded in October.
Although the annual rate has been positive since August, for the past six months the only month to show a monthly increase was September when prices rose 0.7% in the month.  For the other five months prices were either unchanged or falling.  The annual rate is positive because of monthly increases that occurred between February and May.  This upward pressure on prices has eased.
Monthly Inflation November