The economy grew by 2.3% from July to September of this year when measured by Gross Domestic Product. However, activity in the domestic economy measured by Modified Domestic Demand fell by 1.1%.
Ireland’s economy was, again, the best performing economy in Europe in the third quarter of this year.
On an annual basis, the economy measured by GDP grew by 10.9% in the third quarter of the year compared to the same period last year and by 5.9% when measured by Modified Domestic Demand.
However, activity in the domestic economy is showing signs of slowing down with spending by consumers practically flat due to the impact of inflation. Also, investment in computer machinery also slowed.
Output in the key ICT technology was not as strong as it has been and fell 7.4%. However, output by industry which is dominated by the pharmaceutical industry rose by 9%.
Overall, parts of the economy dominated by multinationals grew by 2.5% while the non-multinational sectors declined by 0.1%.
Other data published by the CSO today show that multinational companies now pay a third of the country’s wages. Later this afternoon the Department of Finance will publish the latest tax figures which are expected to show another record increase in corporation tax receipts.
Consumer spending slowed over the third quarter, broadly in line with expectations, though it did grow modestly by 0.3%.
Minister for Finance Paschal Donohoe said he noted the modest easing in the domestic economy during the third quarter.
“Whilst GDP continues to grow strongly, this does not reflect events on the ground in the domestic economy, given the outsized role the multinational sector plays in our economy. Modified domestic demand, our preferred measure of domestic economic activity, decreased by -1 per cent in the third quarter,” he said.
“However, this modest decline in activity largely reflects a return to trend for investment following an exceptionally high level in the second quarter, which was largely driven by multinational investments in plant and machinery.
“Consumer spending slowed over the third quarter, broadly in line with expectations, though it did grow modestly, an encouraging outcome considering the headwinds households continue to face. This resilience reflects the strength of the labour market, with well over 2½ million people in employment, a record level, and an unemployment rate of just 4.4 per cent in November,” Minister Donohoe said.
The Minister said today’s data, as well as the employment data published last week, are very much in line with the Department’s projections, as published at the time of the Budget, last September.