GDP up 3.5% in Third Quarter

Third Quarter Indicators of Macro Trends

The third quarter national accounts were published in December and confirm a sharp jump in GDP on the second quarter. The latest accounts have also revised upwards their estimates back to Q4 2023. Overall, GDP was up 3.5% in the third quarter compared with the second which itself was revised up 0.5%. The third quarter was 2.5% up on the same quarter in 2023 but overall GDP in the first nine months of the year was 1.6% lower than the first nine months of 2023. However, an increase of 1% in the final quarter would eliminate that and make 2024 level with 2023. The CBI’s and ESRI’s latest forecasts (September) on this are possibly a little pessimistic.

Modified Domestic Demand (MDD), a measure of domestic economic activity, fell in the third quarter and has fallen in each of the preceding two quarters. It is now about 2% lower in the first nine months of this year compared to 2023. For the whole year, MDD is likely to fall short of the 2023 level, but the CBI might be a little pessimistic in forecasting a fall of 4.4%. Both CBI and ESRI project strong recovery for the economy in 2025 in terms of GDP and particularly MDD.

The only information on the fourth quarter is for October. The indices for industrial production for that month are positive. The overall index rose by 7% on September with the modern sector in the lead with a 6% rise, but the traditional sector also edged ahead. However, as can be seen in the second graph, the modern sector had gone into a steep dive in the third quarter of 2023 and has not yet recovered: in the first nine months of the year it is 12% below the same period in 2023.

An available fait=rly current general indicator of economic trends is unemployment. This edged up very slightly in October compared to September but is still well below levels throughout 2023.

The final current indicator is the AIB survey of ourchasing managers. Anything above zero in this presentation represents an increase and it can be seen that services have been doing very well in 2024 to date. Manufacturing has not been so bouyant this year but in October the index moved into positive territory.