Ireland officially out of recession despite domestic economy contracting

Country additionally boosted by signs of growth and improvement in shattered building and construction businesses

Ireland is officially out of recession after its gross domestic product increased by 0.4% in the three months to June.

The figures, which come from Ireland's Central Statistics Office, show the country has emerged from its second recession in five years - a downturn that hit the country at the end of 2012 and the first few months of this year.

The figures will be a boost for the Government as it prepares Budget 2014, which is to be announced on October 15.

But despite one set of good figures, the domestic economy is suffering as it contracted by 0.4% in the same period.

Among the good returns for the country, there were signs of growth and improvement in shattered building and construction businesses.

The sector has reported growth of 4.2% from March to June.

The revival will go some way towards alleviating the impact of massive unemployment caused by the 170,000 builders who lost jobs in the wake of the property collapse from 2007.

Other improvements which have helped spark another recovery include a 1.5 billion euro increase in exports and people spending more - up 0.7% on the first three months of the year.

Businesses involved in distribution, transport, software and communication increased by 1.4%.

The Irish economy was in recession throughout 2008 and 2009 before recovering slightly and then dipping again at the end of last year and start of this year.

Aidan Punch, CSO assistant director general, warned against reading too much into small changes in economic figures.

“All of these are very minor changes - very, very minor changes. So it's important not to read too much into it,” he said.

Mr Punch said it was a “conundrum” that GDP has fallen year-on-year while employment rates seem to have increased.

“They nearly seem counter-intuitive in a sense because normally one expects to get a bit of growth and then employment follows,” Mr Punch said.

“We know it's a conundrum. We're working on it and we'd probably need more data.”

The CSO said other countries may have experienced a similar trend.

Additional reporting PA