Evidence of large-scale slowdown in economic activity has mounted with new figures pointing to a sharp fall off in industrial production. In the three months to end July the volume of industrial production is estimated to have fallen 12.7 per cent, according to data released by the Central Statistics Office.
The figures come at the same time as a warning from employers' lobby IBEC that the Government has "no option but to take a firm hand" on expenditure.
The group's chief economist Mr David Croughan has warned that expenditure growth of almost 25 per cent with revenue growth of only 4 per cent can only lead to financial disaster, if allowed to continue.
Writing in IBEC's latest Quarterly Economic Trends publication he said the grapevine suggested the first round of departmental expenditure estimates bore no relation to this new economic reality.
"IBEC recognises that there is a need for public expenditure to allow the economy to work effectively, to provide essential public services and to plug the gaps where the marketplace cannot deliver. Government now has no option but to take a firm hand on expenditure, prioritise and deliver a service based on necessity, quality and value for money."
The CSO warned that the estimated fall-off in industrial production was based on past trends. But the data has been enhanced by taking into account the actual returns for firms which have already responded. More detailed figures will not be available until the end of the month.
And fears increased that Europe overall may be heading for a recession with weaker growth and confidence across much of the world. The French statistics office reported yesterday that the French economy expanded at the weakest pace in more than four years in the second quarter as faltering world growth weighed on exports.
Italian consumer confidence fell for a second straight month in August. Growth in Germany, France's largest trading partner, ground to a halt in the second quarter. The US posted the slowest growth in eight years in the same period and the Japanese economy contracted. In France, consumer spending slowed and investment stalled.
