On September 16, 2024, “Clear Politics” host Sergey Gusachenko spoke on Belarus 1 about a catastrophic decline in eurozone industry, especially in Ireland.
“Ireland set a new record for the steepest plunge. Industrial production over the past year dropped by 34%.”
After his remarks, the program aired a segment where the narrator quoted a Russian news site, Baltnews, from December 29, 2023.
“So it turns out the country lost a third of its production in just one year. It’s almost as if the war isn’t somewhere else in Europe, but happening right in Dublin. The sad fact is that industrial production across the eurozone is gradually fading away.”
In its article, Baltnews cites the Financial Times as its source. But the WTF team reviewed the British business paper’s story and found that Baltnews got it wrong.
The original source explains that major U.S. tech and pharmaceutical companies—like Apple and Pfizer—set up offices in Ireland to take advantage of its low 12.5% corporate tax rate. But they often manufacture their products under contract or trade agreements in other countries, usually in Asia, where costs are lower. However, the intellectual property rights and profits stay with their Irish subsidiaries. So when these companies scale back their international operations, it shows up as a drop in Ireland’s industrial numbers. These month-to-month swings in Ireland’s data end up distorting the statistics for the whole eurozone.
In October 2023, Irish industrial production was indeed down 34% compared to October 2022. But by December, output had surged more than 40% year over year.
Ireland’s statistics agency cautions that the numbers should be viewed over the long term because monthly reports swing dramatically. To provide a clearer picture, the agency releases separate figures for modern and traditional manufacturing sectors.
The blue line in the chart above shows the so-called modern sector—chemical, pharmaceutical, computer and electronics industries. Over the past two years, its numbers have dropped and spiked several times.
The green line represents traditional manufacturing, which runs without the wild swings.
So what’s really happening with Irish industry? By the end of 2023, industrial output had dropped by nearly 8%. Before that, Ireland saw four straight years of growth, with annual peaks hitting 28%.
Across the eurozone as a whole, industrial production fell just over 2%—hardly a dramatic plunge.
