The Irish economy grew in the third quarter of the year, with both gross domestic product (GDP) and gross national product (GNP) showing the first quarterly increase in almost three years.
Initial estimates showed seasonally adjusted figures for GDP rose by 0.5 per cent, with gross national product growing 1.1 per cent. GNP excludes the repatriated profits of foreign-owned enterprises and interest payments to foreign entities.
The last time both measures showed a quarterly increase was the fourth quarter of 2007.
The growth was mainly fuelled by a rise in industry, with the sector recording a 1.4 per cent increase. This was despite an 8.2 per cent decline in building and construction. Agriculture also grew, but declines were seen in distribution, transport and communication, which fell by 2.5 per cent and the services sector, which declined 1.6 per cent.
However, domestic demand remained weak, with net export growth offsetting the fall in demand. The Central Statistics Office said all components of domestic demand recorded seasonally adjusted quarterly declines at constant prices.
Bloxham's chief economist Alan McQuaid said the results were "positive".
"It has been another disappointing and difficult year for the Irish economy but at least we are heading into 2011 with some positive momentum on the GDP/GNP front," he said.
"Furthermore, with US growth forecasts for next year being revised up on the back of the extension of tax cuts, that can only augur well for a open economy like Ireland's, and one highly dependent on the US."
During the three-month period, exports rose 3.6 per cent and imports gained 1.4 per cent.
The weakness of construction sector activity was reflected in an 18.1 per cent decline in capital formation, while imports of transport equipment remained low.
A decline of 1.7 per cent was recorded in Government expenditure compared to the previous quarter. Consumer spending was down by 0.5 per cent.
At constant prices, annual GDP fell 0.5 per cent in the quarter, with the growth in industry insufficient to counterbalance the declines in the services sectors, and a rise in net exports unable to offset the combined declines in all components of domestic demand.
"It is now very likely that the Irish economy will in 2010 contract for the third year running in both GDP and GNP terms, though the rate of fall is likely to be lower than both 2008 and 2009," said Mr McQuaid.
"We now think GDP will show an average fall of 0.75 per cent in 2010 down from the record fall of 7.6 per cent in 2009 and the decrease of 3.5 per cent posted in 2008. Meanwhile, GNP is now projected to be down 2.75 per cent this year after the double-digit (10.7 per cent) decline in 2009 and the decrease of 3.5 per cent in 2008."
