04 December 2020
Assistant Director General with responsibility for Economic Statistics, Jennifer Banim, commented:
‘Easing of COVID-19 related restrictions led to growth across almost all sectors of the economy in Quarter 3 (Q3), 2020. Sectors focused on the domestic market experienced significantly higher levels of economic activity in this quarter, with Construction increasing by 53.4% and the Distribution, Transport, Hotels & Restaurants sector growing by 46.9%. Growth continued in the more globalised sectors and Industry increased by 4.6% while the Information & Communication sector increased by 24.9% in the quarter. The Arts & Entertainment sector contracted by 3.9% in Q3, 2020.
Looking at expenditure in the economy, personal spending on goods and services (the PCE indicator) increased by 21.3% in Q3, 2020. This significant growth brings personal spending amounts in the quarter to €25.8 billion, approximately €0.5 billion lower than Q1, 2020 levels. Government spending on goods and services showed a small increase of 0.1% in Q3, 2020
Overall, Gross Domestic Product (GDP) is estimated to have increased by 11.1% in Q3, 2020, driven largely by the increases in personal spending and by growth of 5.7% in Exports of Goods & Services in the quarter. Gross National Product (GNP) - a measure of economic activity that excludes the profits of multinationals - contracted by 1.9%, reflecting the significant increase in multinational profit outflows in Q3, 2020.’
Commenting on the impact of globalisation activities in the quarter, Ms Banim said:
‘As in the previous quarter, investment in Intellectual Property Products (IPP) and in aircraft by leasing companies was low in Q3, 2020. Modified Domestic Demand (MDD), a broad measure of underlying domestic demand that excludes IPP and aircraft related globalisation effects, increased by 18.7% in Q3, 2020. Along with the increase in personal spending, the main driver of MDD growth in the quarter was an increase of 34.4% in underlying domestic capital investment.
In International Accounts results, the Current Account of the Balance of Payments recorded a surplus of €12.7 billion in flows with the rest of the world in Q3, 2020. The accumulation of the IPP relocations to Ireland in recent years is now leading to reduced overall quarterly royalty payments abroad. Specifically, royalty imports for pharmaceutical products and preparations decreased to €2.9 billion in Q3, 2020 from €5.3 billion in Q3, 2019. Multinational profit outflows were €28.1 billion in the quarter, an increase of €6.6 billion on Q3, 2019 levels.
Today’s International Accounts publication includes a table of Current Account transactions with the UK. The results show a surplus of €3.2 billion for Trade in Goods & Services with the UK in Q3, 2020. The trade surplus was offset by a deficit of €1.9 billion for income flows, giving an overall Current Account surplus of €1.3 billion with the UK in the quarter.’
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