Professor John McHale:

The real issue here relates to the uncertainty that it creates around growth forecasts. The CSO is responsible for measuring GDP, and what happened in the first half of the year was a real phenomenon. Contract manufacturing has been included in the figures in the past but it surged in the first half of this year. Given that it is specific to a handful of firms, nobody really knows how it is going to evolve in the future. However, it had a very big impact in the first six months of the year. That impact was equivalent to approximately 2.5% of annualised GDP or 5% of a half year's GDP. It has almost become a cliché to say that there is uncertainty around Irish macroeconomic forecasts, particularly in light of the volatility in the economy. There is, however, an additional source of uncertainty so that forecasts are unusually uncertain. That is the main point we were making.