02 September 2022
Assistant Director General with responsibility for Economic Statistics, Jennifer Banim, commented:
“In today’s results, Gross Domestic Product (GDP) is estimated to have increased by 1.8% in Q2 2022. For Gross National Product (GNP) – a measure of economic activity that excludes the profits of multinationals – growth of 2.1% is estimated for the quarter.
The globalised Industry (excl. Construction) sector expanded by 5.0% in Q2 2022 compared with Q1 2022 while the Information & Communication sector increased by 4.9% over the same period. Overall, multinational-dominated sectors grew by 6.0% in the quarter and accounted for 54.8% of total value added in the economy, compared with a 45.2% share for all other sectors.
While economic activity increased for many of the sectors focused on the domestic market, there was a mixed picture overall. The Construction sector expanded by 2.7% in the quarter while the Distribution, Transport, Hotels & Restaurants sector increased by 1.5% quarter-on-quarter. However, there were declines in Professional, Administrative & Support activities, Finance & Insurance, and Agriculture Forestry & Fishing in the quarter of 0.3%, 0.4% and 0.3% respectively.
Expenditure in the Economy
Looking at expenditure, investment in capital formation rose by 17.9% driven mainly by investment in non-aircraft leasing related Machinery & Equipment and in Intangible Assets. Government spending on goods and services increased by 2.7% in Q2, while personal spending on goods and services (the PCE indicator) increased by 1.8% in the quarter. Net exports of Goods & Services fell by 1.8% in the second quarter of 2022 or by €0.9bn. Examining PCE at constant price levels over the past three years, personal spending in Q2 2022 was 1.7% below the peak pre-pandemic level of personal spending recorded in Q2 2019.
Impact of Globalisation and the Indicators of Underlying Domestic Activity
Final Domestic Demand (FDD), a measure of personal, government and investment spending, increased by 7.8% in Q2 2022, reflecting a continued recovery in personal and investment spending compared with the previous quarter. In Q2 2022, the Modified Domestic Demand (MDD) indicator increased by 4.3%. MDD is an important measure of underlying demand and excludes the globalisation effects of trade in Intellectual Property Products (IPP) and trade in aircraft by leasing companies from the standard Final Domestic Demand measure.
In the International Accounts, the Current Account of the Balance of Payments recorded a surplus of €15.8 billion in flows with the rest of the world in Q2 2022, a dis-improvement of €0.5 billion compared with the surplus of €16.4 billion in Q2 2021. The Merchandise balance improved by €8.9 billion in Q2 2022 compared to the same quarter in 2021 while the Services balance disimproved by €2.2 billion. Net outflows of multinational profits were €29.3 billion in the quarter, an increase of €5.3 billion on Q2 2021 levels.”
Results for the first half-year of 2022
Analysing the period from January to June 2022, National Accounts Statistician Gordon Cavanagh commented:
“Results for the first half of 2022 (H1 2022) compared with the equivalent period of 2021 show GDP increasing by 11.0%. Factor income outflows were €9.2 billion higher than in H1 2021, leading to an overall increase in GNP of 8.9% for the first six months of 2022 compared with the equivalent six months of 2021.
The continued easing of the COVID-19 restrictions varied in impact across the sectors of the economy in H1 2022. In the globalised sectors, strong growth continued with the Information & Communication sector growing by 16.3% in the period and the Industry sector (excl. Construction) by 14.7% in H1 2022 compared with H1 2021. Certain sectors focused on the domestic market also experienced strong growth with Construction growing by 26.2% in the half year, the Distribution, Transport, Hotels & Restaurants sector by 11.6%, and Arts & Entertainment by 19.0%. However other domestic facing sectors posted more modest growth in the half year with the Professional, Administrative & Support sector growing by 6.9%, the Finance & Insurance sector expanding by 6.6% and Agriculture, Forestry & Fishing growing by 5.3%.
First-Half Expenditure in the Economy
Investment in capital formation increased by 22.6% in the first half of the year while personal spending (PCE) increased by 10.2%. Net Exports rose by €6.1 billion, or 6.2% in the six-month period, while Government spending on Goods and Services was broadly unchanged in H1 2022 compared with H1 2021. Final Domestic Demand increased by 12.4% in the first half of 2022 compared with the equivalent period of 2021 while the MDD indicator grew by 11.7% in the same period.”
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