The economy expanded by almost 8 per cent last year, marking the sixth successive year of strong growth, according to the latest figures from the Central Statistics Office.
Gross National Product grew by 7.8 per cent in 1999 compared with 8.1 per cent in 1998, slightly lower than some expectations as companies disposed of stocks after the Asian crisis and in the run up to Y2K.
Figures are not yet available for the first three months of this year but analysts say that companies are once again building up stocks and growth is likely to have accelerated.
Gross Domestic Product, which includes multinational profit repatriations, grew by 9.8 per cent compared with 8.9 per cent the previous year. This is equivalent to £38,852 (€49,332) for every person at work in the economy or £15,721 per head of population. In the six years since 1993 the economy has grown by 57 per cent in terms of GNP.
Consumer spending once again was the main driver of the boom - although at a slightly lower rate than many had predicted - fuelled by very strong growth in both employment and pay. Total remuneration was up 12.5 per cent, pointing to employment growth of 7.5 per cent and wages growth of 5 per cent in 1999, compared with 1 per cent allowed under Partnership 2000.
However wages are likely to have grown faster than this as the average figure is distorted by growing numbers of jobs at lower salary levels, according to Mr Mick Lucey, senior statistician at the CSO.
Consumer spending rose by 11.3 per cent in 1999 while the increase in Government spending was 9.7 per cent. When price rises are discounted the real increases in these sectors were 7.7 per cent and 5.2 per cent respectively.
Investment in new buildings and capital equipment also continued to rise strongly, up 21.8 per cent in money terms or 13 per cent in real terms. Interestingly, the value of stocks fell £57 million during 1999. This was probably the result of companies depleting stocks at the beginning of the year in response to the Russian and Far East crises and later in the year to Y2K. It is expected to rebound strongly this year.
According to Mr Jim Power, chief economist at Bank of Ireland, consumer consumption and Government spending are likely to grow as strongly in 2000 as last year. As stocks are built up again the economy will expand by more than 10 per cent this year, he said.
Exports and imports continued to grow strongly. However, imports picked up quicker. Exports exceeded imports by £9.48 billion in 1999 compared with £6.9 billion in 1998. This was offset by an increase in payments to the rest of the world which increased by £2.59 billion, mainly reflecting profit repatriations.
Profits are also growing strongly but at a far slower rate than previous years. The reason for this is unclear because 1999 was generally considered to have been a very good year for the corporate sector. It may be attributable partly to the slow growth in the first half of 1999 in the aftermath of the Asian crisis or a larger than expected slowdown in indigenous sectors of the economy. The rate of growth of profits slowed to 15.1 per cent from 22.4 per cent in 1998.
Mr Bill Keating, director of the CSO, said the slowdown was not surprising given the very high growth rates of recent years.
According to the IBEC/ESRI monthly industrial survey, growth was very strong to the end of last year and into the first quarter of this year, although this data does currently under-represent the high tech sector.
The CSO has also reported a small balance of payments surplus of £78 million in the first three months of 2000; this compares to a marginal deficit of £15 million in the same period in 1999. The combined surpluses for merchandise and current transfers were almost entirely offset by deficits on services and income.
