Last issue

Included this week:

  • Real House Price Index Q3
  • Unemployment
  • Household Finances
  • Industrial Production
  • Employee Compensation

Real HPI

In the last issue we seen that comparable countries in the eurozone have been more responsive to the ECB hikes then Ireland, we assume we will see subsequent adverse effects in the housing market in these regions quicker than in Ireland.

German HPI have seen its first real terms decrease since the recovery from the GFC. The French series is approaching parity where the Irish series, although slowing, is still showing strong year on year increases.

German HPI have seen its first real terms decrease since the recovery from the GFC. The French series is approaching parity where the Irish series, although slowing, is still showing strong year on year increases.


Unemployment

Headline


Live Register

A negative value indicates a decrease in the number of people on the live register. The closer the value to zero indicates that it is decreasing at a slower rate, as is the case generally above.

A negative value indicates a decrease in the number of people on the live register. The closer the value to zero indicates that it is decreasing at a slower rate, as is the case generally above.


Household Finances

Household finances yet to roll over but worth keeping an eye on in the coming quarters. The savings ratio is still double the long term average.


In nominal terms at least, housholds are in a strong position. A real terms analsysis is warranted.

In nominal terms at least, housholds are in a strong position. A real terms analsysis is warranted.



Industrial Production

Irish industrial production is a volatile series, this is due largely to the pharmaceutical sector. The traditional sectors have still exhibited strong growth but at a more stable rate

Irish industrial production is a volatile series, this is due largely to the pharmaceutical sector. The traditional sectors have still exhibited strong growth but at a more stable rate

The Irish series can skew the european averages as the growth/variation in Ireland dwarfs that of any comparable countries. The left panel above shows a line chart of year on year change for the Euro Area 19 overlayed onto the Irish series. The right panel shows the year on year change for comparable countries. Note the scale from the chart above vary from panel to panel.

The Irish series can skew the european averages as the growth/variation in Ireland dwarfs that of any comparable countries. The left panel above shows a line chart of year on year change for the Euro Area 19 overlayed onto the Irish series. The right panel shows the year on year change for comparable countries. Note the scale from the chart above vary from panel to panel.

The FT reported last year that Irish industrial production can skew the European index and that this was laregely to do with the pharmaceutical sector.

In relative terms the Information and Communication sector is a significant contributor to industrial turnover. Manufacturing gained significant share in 2015. The series is annualised so there is naturally less noise in the series. It is helpful to understand the proportions even if it is aggregated and lagged.

In relative terms the Information and Communication sector is a significant contributor to industrial turnover. Manufacturing gained significant share in 2015. The series is annualised so there is naturally less noise in the series. It is helpful to understand the proportions even if it is aggregated and lagged.

NACE Rev 2 - Level 1
id CODES NAMES
1 B Mining and quarrying
2 C Manufacturing
3 D Electricity, gas, steam and air conditioning supply
4 E Water supply; sewerage; waste managment and remediation activities
5 F Construction
6 G Wholesale and retail trade; repair of motor vehicles and motorcycles
7 H Transporting and storage
8 I Accommodation and food service activities
9 J Information and communication
10 L Real estate activities
11 M Professional, scientific and technical activities
12 N Administrative and support service activities


Wage adjusted labour productivity suggests that there are some underlying factors in Manufacturing and IT that differentiates Ireland from comparables. While this is what we would expect, the exact drivers remain hidden in the aggregate figures.

Wage adjusted labour productivity suggests that there are some underlying factors in Manufacturing and IT that differentiates Ireland from comparables. While this is what we would expect, the exact drivers remain hidden in the aggregate figures.

Whether there are some consultancy and soft skills involved in production that is driving the volatility will need a deeper analysis.

For instance the prior analysis C - Manufacturing is level 1. A better understanding would be gleaned from C21 - Manufacture of basic pharmaceutical products and pharmaceutical preparations or G46.4.6 - Wholesale of pharmaceutical goods. - This level of granularity is not as accessible through the API and will take more time. Furthermore there are variances in the type of production to be considered, according to Eurostat:

  • Sold production is defined as the production carried out at any time and sold (invoiced) during the reference period (variable 251001).
  • Production under sub-contracted operations is the production carried out by a sub-contractor and sold to the principal in line under the conditions for sub-contracted operations (variable 251002).
  • Actual production includes any production that is carried out. These are products which are intended for sale, processed into another product, fitted into another product, or put into stock (variable 251003).


Employee Compensation

Compensation of employees is defined as the total remuneration, in cash or in kind, payable by an employer to an employee. Persons employed per sector is not aggregated in the same manner and some sectors are not included. So generating a compensation per capita index will take more time. Consider this when viewing the below trends.

Irish employee compensation has grown more than the Euro Area average post pandemic, haven been hit harder initially. This is not exactly wage growth but an index I generated of the seasonally adjusted compensation (in millions of euros). - The comparison period, Jan 2020 had a comparable unemployment rate.

Irish employee compensation has grown more than the Euro Area average post pandemic, haven been hit harder initially. This is not exactly wage growth but an index I generated of the seasonally adjusted compensation (in millions of euros). - The comparison period, Jan 2020 had a comparable unemployment rate.

The sectors not defined earlier are A: Agriculture & Forrestry, K: Financial & Insurance, O-Q - Public Service, Education and Human Health and finally R-U - Arts & Recreation

The sectors not defined earlier are A: Agriculture & Forrestry, K: Financial & Insurance, O-Q - Public Service, Education and Human Health and finally R-U - Arts & Recreation