The economy rebounded in the third quarter of 2005 according to figures released yesterday, indicating a good Christmas is in store for retailers.
The latest CSO Quarterly National Accounts show that Gross Domestic Product (GDP) - which measures the amount of goods and services produced in the economy each year - grew in volume terms by 4.8 per cent in the three months to September, up slightly from 4.6 per cent in the second quarter.
In the nine months to end September, economic activity grew by 4 per cent, compared to 3 per cent growth in the first half of the year.
But the CSO said that productivity in the economy continued to decline.
"There are two main reasons for this. Construction output growth is not as strong as employment growth and industrial production remains weak," said CSO Director Bill Keating.
He said that strong activity in repairs and maintenance was a possible reason why construction sector employment growth was running ahead of output growth in the period.
In the last quarter of 2004 and first quarter of 2005 GDP was growing by around 2.5 per cent. The latest figures mean that GDP growth has now exceeded four per cent for the second successive quarter, making the government's latest forecast for growth in 2005 of 4.6 per cent, more likely to be attained.
Economic growth has become less imbalanced, according to the latest evidence.
Revised figures for the second quarter show that gross domestic fixed capital Formation - investment - grew by 13.5 per cent year-on-year.
Personal consumption and Government expenditure grew more modestly, by five and 2.4 per cent respectively.
In the third quarter investment growth, at 7.7 per cent, remained strong but was more in line with personal consumption and government expenditure, which grew by 6.5 and 3.5 per cent respectively.
Strong investment growth was attributed to strong growth in the building industry, with repairs and maintenance activity particularly strong. However, net exports continue to decline year-on-year.
Analysed by sector, output in industry rose by three per cent, compared to growth of 5.6 per cent in distribution and 6.1 per cent in other services, rates of growth that were better or comparable than in the second quarter. The agricultural sector deteriorated further in the third quarter, with output falling by seven per cent.
Figures for the balance of payments were also released yesterday by the CSO, showing that Ireland continues to run a deficit of payments with the rest of the world.
Ireland continues to run a surplus on merchandise trade, with exports exceeding imports by €7.9 billion. But this was offset by a deficit on services trade and on income to result in a overall deficit of €381 million in the third quarter of 2005, modestly lower than the deficit of €532 million recorded in the third quarter of 2004.
