Official figures show contrasting fortunes for the domestic and multinational sectors of the Irish economy in the first quarter of this year, when the country was again under tight COVID-19 restrictions.

The Central Statistics Office (CSO) said this morning (4 June) that economic output measured by gross domestic product (GDP) increased by 7.8% during the three-month period, mainly due to higher exports and lower imports.

But modified domestic demand, a broad measure of underlying domestic activity that covers personal, Government and investment spending, dropped by 2.9%.

Spending hit

Personal spending on goods and services fell by more than 5%, while there were sharp drops in output in other domestic-focused economic sectors.

Construction output slumped by 23%, and there was a drop of almost 10% in the category covering distribution, transport, hotels, and restaurants.

Industrial output grew by 12%, however, while the technology sector recorded growth of 19%.

According to the CSO, areas of the economy dominated by multinational companies showed growth of almost 18% from the previous quarter, while those focused on the domestic economy declined by just over 2%.

Exports solid

The figures show that exports rose 5.8% compared with the final three months of 2020, but imports fell by almost 9%. This was the main factor behind the GDP growth.

Gross national product (GNP), which excludes profits made by multinational companies, fell by 1% in the quarter.

In April, the Department of Finance’s Stability Programme Update forecast that GDP would grow by 4.5% this year, with modified domestic demand rising by 2.5%, as COVID-19 restrictions eased.

Separate CSO figures show a surplus of €4.9 billion for trade in goods and services with the UK in the first quarter of this year.