Huge increase in net exports.

[freedomlover]

While the media in Ireland and posters on P.ie were reacting to yesterday's ESRI report as if it was Divine Revelation (instead of just a collection of forecasts by second-rate economists with a very poor track record in forecasting), I was digesting some far more significant statistics published yesterday by the CSO. The main ones were the merchandise export and import volumes statistics for Q1 2008. This is what they showed, both on a year-on-year basis and a quarter-on-quarter basis:

year-on-year:

between Q1 2007 and Q1 2008, the volume of merchandise exports was UP 2.3% and that of imports was DOWN 4.5%

quarter-on-quarter:

between Q4 2007 and Q1 2008, the volume of merchandise exports was UP 6.1% and that of imports was DOWN 0.8%

What these figures means is that in both cases net merchandise exports (exports minus imports) were UP by about 7%. The significance of this is that net exports are one of the main components in the calculation of GDP. Each 1% increase in net merchandise exports adds about 0.5% to GDP. This doesn't necessarily mean that GDP will increase by 3.5%, but that the 7% increase in net merchandise exports will cancel out about 3.5% of any fall in GDP resulting from reduced house-building, or whatever.

I don't want to be too technical, but what yesterday's figures mean is that the trend in net merchandise exports for Q1 2008 will have to be totally reversed in the rest of 2008 for ESRI's recession forecast to prove accurate. Obviously, that's a possibility and I wouldn't rule it out, although I'd consider it unlikely. It depends largely on the world economy. But, if the trend in net mercandise exports for Q1 2008 continues for the rest of 2008, then ESRI will be entering the Guinness Book of Records for the worst economic forecast ever made.

[locke]

Do people count as exports?

[freedomlover]

Do people count as exports?

No, but if they did, our trade balance would be up the creek, as we are currently importing 67,000 more people annually than we export.

[The Earl of Desmond]

Do those figures include anything actually made in Ireland as opposed to flowing through the books of US multinationals?

[smitchy2]

They did actually take into account the export figures. Did you think they left them out.
This reflects continued strength in exports from Irish based companies. I cannot see it lasting.
Can not see it lasting throughout the year in the non-pharma areas. So I see the ESRI figure to be relatively accurate.
Imagine what state we would be in if the exports were strong.

[droghedasouth]

While the media in Ireland and posters on P.ie were reacting to yesterday's ESRI report as if it was Divine Revelation (instead of just a collection of forecasts by second-rate economists with a very poor track record in forecasting), I was digesting some far more significant statistics published yesterday by the CSO. The main ones were the merchandise export and import volumes statistics for Q1 2008. This is what they showed, both on a year-on-year basis and a quarter-on-quarter basis:

year-on-year:

between Q1 2007 and Q1 2008, the volume of merchandise exports was UP 2.3% and that of imports was DOWN 4.5%

quarter-on-quarter:

between Q4 2007 and Q1 2008, the volume of merchandise exports was UP 6.1% and that of imports was DOWN 0.8%

What these figures means is that in both cases net merchandise exports (exports minus imports) were UP by about 7%. The significance of this is that net exports are one of the main components in the calculation of GDP. Each 1% increase in net merchandise exports adds about 0.5% to GDP. This doesn't necessarily mean that GDP will increase by 3.5%, but that the 7% increase in net merchandise exports will cancel out about 3.5% of any fall in GDP resulting from reduced house-building, or whatever.

I don't want to be too technical, but what yesterday's figures mean is that the trend in net merchandise exports for Q1 2008 will have to be totally reversed in the rest of 2008 for ESRI's recession forecast to prove accurate. Obviously, that's a possibility and I wouldn't rule it out, although I'd consider it unlikely. It depends largely on the world economy. But, if the trend in net mercandise exports for Q1 2008 continues for the rest of 2008, then ESRI will be entering the Guinness Book of Records for the worst economic forecast ever made.

But you know that GDP is meaningless figure in Ireland.

Do the figures tell us anything about GNP?

[GrainneMhaol]

From the ESRI release, their prediction that Ireland will go into recession this year is based solely on GNP figures, which to some degree strips out the effect of exports from Ireland that are in reality products of multinationals based out of Ireland for tax purposes i.e. not actually results of Irish economic activity. If the ESRI were using GDP as a measure then with these export figures, they probably wouldn't be predicting recession! But as droghedasouth said, GDP is just not a good measure of the Irish economic picture and ESRI rarely use it for that reason.

http://www.esri.ie/news_events/lates...en_9/index.xml

We expect GNP to fall by 0.4 percent in real terms in 2008. This implies that Ireland will experience its first recession since 1983.

[Ard-Taoiseach]

Enterprise Ireland-backed firms are also doing well. This is the sort of growth we must constantly be fostering:

Enterprise Ireland firms beat target

[stewiegriffin]

How are we doing with the ol buckets and shovels ?

[freedomlover]

From the ESRI release, their prediction that Ireland will go into recession this year is based solely on GNP figures, which to some degree strips out the effect of exports from Ireland that are in reality products of multinationals based out of Ireland for tax purposes i.e. not actually results of Irish economic activity. If the ESRI were using GDP as a measure then with these export figures, they probably wouldn't be predicting recession! But as droghedasouth said, GDP is just not a good measure of the Irish economic picture and ESRI rarely use it for that reason.

http://www.esri.ie/news_events/lates...en_9/index.xml

We expect GNP to fall by 0.4 percent in real terms in 2008. This implies that Ireland will experience its first recession since 1983.

Not totally sure, but I think their forecast for GDP was also minus 0.4 per cent.