Hugh Byrne
Question:60 Mr. H. Byrne asked the Minister for Finance if statistical indicators since the beginning of 1996 are showing any slowdown in economic growth or demand. [17281/96]
Written Answers. - Economic Indicators.
I do not believe that statistical indicators since the beginning of 1996 are showing any significant slowdown in economic growth or demand. On the contrary, the available data point to a continuation of the pattern of strong growth which has characterised Ireland's economy in the last couple of years.
Domestic demand and consumer spending in particular have been quite strong thus far in 1996. Car sales have been particularly buoyant, with over 106,000 new cars being registered in the first nine months of the year, representing a rise of some 30 per cent on 1995 levels. The strength of new car sales helped overall retail sales to grow by 7 per cent year-on-year in the first seven months of 1996; excluding garage activity, a rise of close to 5 per cent was recorded. However the value of retail sales in the latest three month period actually fell slightly by comparison with the preceding three month period.
The statistics available for the building and construction sector suggest that activity so far this year has been quite strong. Employment in the sector in August was some 6.8 per cent higher year-on-year, while house completions in the first six months of the year, at over 15,000 were 12.6 per cent higher than in the same period of 1995.
Exports rose by 12.9 per cent in value terms over the first half of 1996, while the corresponding rise in imports was 12.3 per cent. Manufacturing output in the same period was also quite buoyant, rising by some 12.5 per cent year-on-year. Manufacturing employment continued to register gains, with numbers at work in the sector growing by 4.6 per cent year-on-year in the second quarter.
In relation to employment generally, the recently released Labour Force Survey confirms the pattern of strong growth. In the 12 months to April 1996, the number of persons at work in the economy increased by 45,000.
In contrast to the buoyancy in other sectors, the agricultural sector has experienced a sharp reduction in the value of beef output due mainly to the BSE problem, though other production areas within agriculture appear, in aggregate, to be doing quite well.
Tax performance is an important leading indicator of economic performance, as the trend in tax receipts offers some insight into payroll trends and the level of consumption. Over the year to date, buoyancy in virtually all tax heads has been a striking feature of the Exchequer returns, and a large surplus over the budget day target is clearly in prospect.
In its mid-year report, Economic Review and Outlook 1996, my Department forecast that GNP would grow by 6 per cent in volume terms this year. The key assumptions underlying that projection were that personal consumption would rise faster than in 1995, investment would broadly sustain the high growth rate achieved in 1995, and exports and manufacturing output would continue to grow strongly, though at a more moderate rate than in 1995. If achieved, this forecast growth rate of 6 per cent will represent one of the highest outcomes in the industrial world, though it will slightly lag behind the official 1995 outturn of 7.3 per cent.
In light of the emerging picture which I have just outlined across the broad sweep of the principal economic indicators, I expect that my Department's mid-year growth forecast for 1996 will be attained, if not exceeded.