Session 2 : The Downturn & Irish Business

Richard McMahonCentral Statistics Office

Outline

Re-cap

Overview of business statistics

Structural & Thematic Business Statistics

Short-term business indicators Construction indicators

Industrial Production

Retail Sales

Other services

International comparisons

Other short-term CSO indicators

Re-cap - The Downturn

28,000

33,000

38,000

43,000

48,000

53,000

€mill

ion

s

Period

Seasonally Adjusted GDP & GNP Q1 2002 - Q3 2010

Re-cap

GDP at constant market prices

2007 – €186.6bn

2008 – €180.0bn

2009 - €166.3bn

2010 – first 3 quarters €124.1bn (€165bn annualised approx)

Fall approx. 13% ‘07 to ‘10 (approx. +1% EU-27)

Approx. 21% drop on GNP

Reductions mainly up to Q3 2009

Re-cap

Session 1: Effect on people

Session 2: Effect on business

Session 3: Overall effect on economy

Session 4: Alternative view of effect on economy

Session 5: Accessing CSO data

Background to business statistics

Purpose Provide information on structure and performance of enterprises Measure trends in key economic characteristics Meet EU Regulations Input to compilation of other CSO statistics e.g. National Accounts,

environmental accounts

Key Users Irish and EU Policy makers Economic analysts Media Research community (controlled access microdata files provided subject to

strict criteria)

Key issues Confidentiality Response burden

Operation of enterprise based surveys

Administrative data

Business Register

Administrative data

CSO Business Register

Postal surveys

Release

Publication

Eurostat

Ad hoc

Structural & Thematic Business Statistics

Structural Measures numbers of enterprises by economic sector, firm size, region

P&L and balance sheet variables

Productivity, competitiveness indicators

Frequency : Annual – 2010 results in mid- 2012

Thematic

Use of ICT Foreign Affiliates Research & Innovation Access to Finance Energy Sourcing

Structure of Business Economy

0 10,000 20,000 30,000 40,000 50,000 60,000

IndustryConstruction

Wholesale, retail, motorsTransportation and storage

Accommodation and foodInformation and communication

Financial and insuranceReal estate activities

Professional, scientific and technicalAdministrative and support service

Number of enterprises by sector, 2008

Total enterprises = 203,000

Structure of Business Economy

0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000

IndustryConstruction

Wholesale, retail, motorsTransportation and storage

Accommodation and foodInformation and communication

Financial and insuranceReal estate activities

Professional, scientific and technicalAdministrative and support service

Numbers of persons engaged by sector, 2008

Total employment = 1.5 mn

Ownership Structure of Business Economy, 2008

Number of Enterprises

Gross Value Added Employment

Manufacturing(Enterprises with 3+ employment) Irish 4,545 6,300,742 103,076

Non-Irish 444 25,516,900 92,128

Traded Services (Enterprises with 20+ employment) Irish 6,674 20,051,834 443,486

Non-Irish 909 16,968,537 162,769

Sectoral Contribution to GDP

Short-term Indicators

Timeliness

Monthly within 40 days

Quarterly within 70 - 90 days

Indication of trend

Results are expressed as Indices to base 2005=100

Principal Indicators

Industry : Monthly Industrial Production Index

Construction : Quarterly Survey of Construction, Planning permissions (actual)

Services : Retail Sales Index, Monthly Services Index (Q2 2011 onwards)

Construction Indicators

Planning Permissions (PP)

PPs granted by local authorities

Anticipate trends in construction activity

Quarterly Production in Construction Survey

Measures trends in the value and the volume of production in building and construction

Indicator of change in value added

Over 2,000 firms surveyed

Construction Indicators

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

20

05

Q1

20

05

Q2

20

05

Q3

20

05

Q4

20

06

Q1

20

06

Q2

20

06

Q3

20

06

Q4

20

07

Q1

20

07

Q2

20

07

Q3

20

07

Q4

20

08

Q1

20

08

Q2

20

08

Q3

20

08

Q4

20

09

Q1

20

09

Q2

20

09

Q3

20

09

Q4

20

10

Q1

20

10

Q2

20

10

Q3

Dwellings : Planning Permissions Granted (number)

0

20

40

60

80

100

120

Residential building : Volume of Production (base 2005=100)

Planning permissions

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

No. Planning permissions granted, 2005 - 2010

Dwellings

Other new construction (excluding dwellings)

Extensions

Alteration, conversion and renovation

Construction output

0

25

50

75

100

125

150Volume of Production in Construction (base 2005=100)

All building and constructionResidential building

Non-residential buildingCivil engineering

Monthly Industrial Production

Purpose

Measure changes in value added at constant prices

Methodology

Collect physical quantities manufactured and then value at 2005 prices

Or

Collect value of good manufactured and deflate to 2005 prices

Index is weighted by Gross Value Added

Features

Volatile

Huge impact of multinationals on total results

Monthly Industrial ProductionSeasonally adjusted

405060708090

100110120130140

Industrial Production Index, Q1 2006 - Q4 2010 (base 2005=100)

All Industries

Modern sector

Traditional sectors

Composition of Industrial sector

Modern sector

Pharmaceutical, ICT, medical instruments, electrical equipment

Traditional

Food & beverages, textiles, wood, paper, rubber, metal products, mining, energy etc..

0 50,000 100,000 150,000

Modern

Traditional

Employment (persons)

0 5,000 10,000 15,000 20,000

Modern

Traditional

Gross Value Added (€mn)

Selected Modern industrial sectorsSeasonally adjusted

0

50

100

150

200

2006

Q1

2006

Q2

2006

Q3

2006

Q4

2007

Q1

2007

Q2

2007

Q3

2007

Q4

2008

Q1

2008

Q2

2008

Q3

2008

Q4

2009

Q1

2009

Q2

2009

Q3

2009

Q4

2010

Q1

2010

Q2

2010

Q3

2010

Q4

Industrial Production Indices (base 2005=100)

Pharmceuticals Electronic components and boards

Computers and peripherals Other manufacturing

Selected Traditional industrial sectorsSeasonally adjusted

0

20

40

60

80

100

120

140

2006

Q1…

2006

Q220

06Q3

2006

Q420

07Q1

2007

Q220

07Q3

2007

Q420

08Q1

2008

Q220

08Q3

2008

Q420

09Q1

2009

Q220

09Q3

2009

Q420

10Q1

2010

Q220

10Q3

2010

Q4

Industrial Production Indices (base 2005=100)

Food products and beverages

Wood and wood products

Rubber and plastic products

Fabricated metal products

Retail Sales Index

Purpose

Monthly activity in the retail sector – value and volume

Indicator for final domestic demand

Survey

2,000 retailers (incl bars, motors and fuel) each month

Collect monthly turnover

Use Consumer Price sub-indices to deflate to 2005 prices

Retail Sales Index (incl motors, fuel and bars)

-30

-25

-20

-15

-10

-5

0

5

10

15

2006

M01

2006

M03

2006

M05

2006

M07

2006

M09

2006

M11

2007

M01

2007

M03

2007

M05

2007

M07

2007

M09

2007

M11

2008

M01

2008

M03

2008

M05

2008

M07

2008

M09

2008

M11

2009

M01

2009

M03

2009

M05

2009

M07

2009

M09

2009

M11

2010

M01

2010

M03

2010

M05

2010

M07

2010

M09

2010

M11

2011

M01

% Annual % change for each month, 2006 - 2011

Contributors to Retail Sales Index

Central Statistics Office, Ireland 25

Appendix 1 Updated Baseweights (2005)

Retail Business - NACE Rev 2.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Motor Trade 35.4% 33.0% 29.0% 28.0% 25.5% 23.2% 21.6% 20.9% 20.0% 18.2% 14.0% 8.1% Non Specialised Stores 23.8% 25.2% 27.1% 27.0% 27.6% 28.1% 28.3% 28.7% 29.2% 29.9% 30.2% 28.9% Department Stores 4.1% 3.3% 3.7% 3.9% 4.1% 4.6% 4.8% 4.2% 4.3% 4.7% 5.3% 7.2% Food, Beverages & Tobacco in Specialised Stores 2.2% 2.5% 2.6% 2.6% 2.6% 2.7% 2.7% 2.7% 2.7% 2.8% 2.8% 3.0% Fuel 5.9% 5.8% 6.1% 6.2% 6.3% 6.0% 6.4% 6.1% 6.8% 6.4% 6.7% 5.2% Pharmaceutical, Medical and Cosmetic Articles 3.6% 3.9% 3.8% 4.0% 4.4% 4.3% 4.2% 4.4% 4.4% 4.4% 4.7% 5.2% Clothing, Footwear and Textiles 4.7% 4.4% 5.0% 5.5% 5.8% 6.1% 6.3% 6.6% 6.1% 6.5% 7.1% 9.0% Furniture and Lighting 1.5% 1.5% 1.4% 1.5% 1.7% 1.8% 1.8% 1.7% 2.0% 2.0% 2.2% 2.0% Hardware, Paints and Glass 2.7% 2.8% 3.2% 3.4% 3.6% 3.7% 3.8% 3.6% 3.6% 3.8% 4.0% 3.6% Electrical Goods 3.1% 3.2% 3.1% 3.1% 3.3% 3.5% 3.7% 3.6% 3.8% 4.0% 4.7% 6.1% Books, Newspapers and Stationery 1.1% 1.1% 1.1% 1.1% 1.1% 1.3% 1.4% 1.7% 1.6% 1.4% 1.4% 1.7% Other Retail Sales 4.6% 5.1% 4.9% 5.1% 5.0% 5.1% 5.3% 5.6% 5.7% 6.2% 8.1% 11.3% Bars 7.3% 8.1% 8.9% 8.7% 9.2% 9.6% 9.8% 10.2% 9.8% 9.8% 8.7% 8.7% All Business 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Retail Sales

Central Statistics Office, Ireland 26

40

50

60

70

80

90

100

110

120

130

2005M012005M032005M052005M072005M092005M112006M012006M032006M052006M072006M092006M112007M012007M032007M052007M072007M092007M112008M012008M032008M052008M072008M092008M112009M012009M032009M052009M072009M092009M112010M012010M032010M052010M072010M092010M112011M01

Seasonally adjusted volume indices (base 2005=100)

Core retail

Bars

Motor trades and fuel

Core Retail Sales

Central Statistics Office, Ireland 27

40

50

60

70

80

90

100

110

120

130

140

2005

M01

2005

M04

2005

M07

2005

M10

2006

M01

2006

M04

2006

M07

2006

M10

2007

M01

2007

M04

2007

M07

2007

M10

2008

M01

2008

M04

2008

M07

2008

M10

2009

M01

2009

M04

2009

M07

2009

M10

2010

M01

2010

M04

2010

M07

2010

M10

2011

M01

Supermarkets

Furniture and lighting

Hardware, paints and glass

Department stores

Monthly Services Inquiry

Gap in statistics on the services sector Real output of services

Monthly survey Retail, bars, motors (existing) Other services (new)

New Monthly Indicators Value Indices in 2011

• Indicator of personal expenditure• Indicator of value added

Volume indices in 2012

Monthly Services InquiryExperimental

40

50

60

70

80

90

100

110

120

130Selected Seasonally Adjusted Services Indices

(Base 2005=100)

Business services

Hospitality

Transport &Communications

International Comparisons

0

20

40

60

80

100

120

140

2010

Q220

10Q1

2009

Q420

09Q3

2009

Q220

09Q1

2008

Q420

08Q3

2008

Q220

08Q1

2007

Q420

07Q3

2007

Q220

07Q1

2006

Q420

06Q3

2006

Q220

06Q1

2005

Q420

05Q3

2005

Q220

05Q1

Quarterly Production in Construction (Base 2005=100)

EU27

Germany

Ireland

UK

International Comparisons

60

70

80

90

100

110

120

Industrial Production Index (base 2005=100)

EU27

Germany

Ireland

United Kingdom

International Comparisons

60

70

80

90

100

110

120

130

Core Retail Sales Index (Base 2005=100)

EU27

Germany

Ireland

United Kingdom

Other indicators : Tourism

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

Total inward trips to Ireland for 2006 - 2010

Other indicators : New Car Licensing

0

50,000

100,000

150,000

200,000

250,000

vv

Year

New Private Cars Licensed for the First Time, 1954 - 2010

Oil Crisis('73)

Car Tax Abolished ('77-'81)

Recession ('80-'82)

Scrappage Scheme ('95-'97)

Millenium Spike ('00)

FinancialCrisis ('08)

Scrappage Scheme ('10-'11)

Wrap - up