The Irish economy grew at an overall rate of 4.1% in the twelve months to the end of September, despite a sharp fall in new house building.
According to new figures from the Central Statistics Office, the economy was buoyed up by strong spending by consumers and the Government sector. However, investment in the economy was down by 7.5%.
The weakness in the housing market had a very noticeable effect on the Quarterly National Accounts which measure economic growth and were published today.
The figures show housing output down by 18.5% in the 12 months to the end of September and this served as a major drag on the overall performance of the economy.
Nevertheless, other sectors of the economy continued to performed strongly. For instance personal consumption, which reflects consumer spending, was up by 6.4%. Exports of goods and services were up 8%, and net spending by the Government sector was up by more than 6%.
The clear implication is that the slowdown in the house building sector had not spilled over into other sectors of the economy in any major way by the end of September.
The overall economic growth figure for the economy was just over 4.1%, which is a very strong performance given the international environment. Nevertheless, it is sharply lower than the 8.4% economic growth rate reported earlier in the year.
It is also consistent with the slowdown in economic growth to just 2.3% next year forecast by the ESRI today.
Separate CSO figures show that the Balance of Payments current account showed a deficit of just under €1.8 billion in the third quarter, little changed from Q2 but almost €300m up on the same period a year earlier.
For the first nine months, the deficit is more than €1 billion higher than the same period a year earlier at €6.8 billion. The surplus on trade of goods continued to fall but the services deficit is narrowing, helped by a jump in service exports including financial services and insurance.
