Quarterly Bulletin Q3 2013

The Domestic Economy
Quarterly Bulletin 03 / July 13
19
Table 5: Summary of Agricultural Output and Income 2012 e , 2013 f , 2014 f
2012 e % change in 2013 f % change in 2014 f
€
million
Value Volume Price €
million
Value Volume Price €
million
Goods Output at Producer Prices a 6,717 3.0 1.1 1.9 6,916 2.2 1.1 1.1 7,065
Intermediate Consumption 5,293 3.5 0.8 2.7 5,478 4.1 2.0 2.1 5,703
Net Subsidies plus
Services Output less
Expenses 1,626 -5.0 1,545 -0.5 1,537
Operating Surplus 2,241 5.0 2,353 3.5 2,436
a Including the value of stock changes.
b CSO estimates.
contributory factor to this poor outturn was the
dismal 2012 summer weather conditions which
led to a significant increase in feed usage on
grassland enterprises 5 and severely eroded
profit margins. Overall output, measured at
producer prices, increased by 6.5 per cent per
annum in 2012, due mainly to an increase in
cattle output of 18.1 per cent, as milk output
fell 11.2 per cent. Intermediate consumption
increased by 9.2 per cent per annum which
put a considerable strain on profits.
The first quarter of 2013 was negatively
impacted by poor weather conditions,
necessitating increased feed consumption,
which depressed margins. Following this
difficult start to the year, the positive effects of
more benign weather conditions since then
should support profitability for the remainder of
2013. At this stage, farm incomes are forecast
to increase by about 5 per cent this year and
by 3.5 per cent in 2014. This forecast is based
on milk prices increasing next year, with sheep
and cattle prices expected to stay stable.
The Quarterly National Accounts (QNA), which
are not directly comparable to the Output,
Input and Income in Agriculture estimates,
provide tentative evidence of the negative
outturn for the farming sector in the first
quarter of this year. The QNA point to a 5.4
per cent decline in the output of the broader
Agricultural, Forestry and Fishing sector.
The Labour Market
The results of the Quarterly National Household
Survey (QNHS) for Q1 2013 reveal an
improvement in labour market conditions
during the first three months of the year. The
extent of this was largely unexpected given the
pattern observed in previous quarters and the
trends in other indicators. On an annual basis,
the number at work increased by 20,500,
only the second such rise in 5 years. As in Q4
2012, agriculture accounted for the bulk of the
overall increase in employment. The number
unemployed fell by 29,900 – the largest such
fall since Q1 1999. These gains make a small
inroad into recovering some of the 330,000
peak-to-trough decline in employment during
the crisis.
When adjusted for seasonal factors, the
unemployment rate declined in the first
quarter of 2013 to 13.7 per cent from 14.1
per cent in the previous quarter. This drop
in unemployment was only the third yearon-year
decline since 2005. In contrast to
developments in Q4 2012, when the bulk of
the decline in unemployment was due to a
decline in the labour force, the annual decline
in unemployment in Q1 was due, for the most
part, to an increase in the number at work.
The picture of gradually stabilising labour
market conditions evident in the QNHS data
is also to be seen in the most recent Live
5 CSO originally estimated a reduction in farm incomes of 10 per cent in 2012, declining to 12 per cent in February and now adjusted
to 7.5 per cent for the year. Adjusting for inflation the IFA estimate a steeper decline of 16 per cent. While a recent Teagasc Farm
Survey found a decline in family farm incomes of 15 per cent in 2012.