Irish exports hit by global slowdown and fall-off in demand for Covid vaccines

Irish goods exports have been hit by a slowdown in global demand and, more specifically for the pharma sector here, a fall-off in Covid vaccine demand.

The latest trade figures from the Central Statistics Office (CSO) show the value of merchandise exports for the first eight months of the year was down by 5 per cent (€6.5 billion) to €133 billion on the same period in 2022.

The reversal, the first in several years, comes amid an economic slowdown in the State’s main export markets – the EU, the UK and the US.

It also reflects a natural decline in demand for Covid-related medicines, which had boosted Irish exports at the height of the pandemic.

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The CSO figures show “seasonally adjusted” goods exports were valued at €16.5 billion in August, down marginally on the previous month. Exports of organic chemicals, however, were down by €3.3 billion or 66 per cent to €1.7 billion compared to August last year, the figures show.

Seasonally adjusted goods imports fell by €1.3 billion (11 per cent) to €10.6 billion leading to an increase, generating a seasonally adjusted trade surplus for August of just under €6 billion.

“Seasonal adjustment compares month-to-month data by removing fluctuations that may occur due to seasonal patterns in trade,” the CSO noted.

The EU accounted for €6.2 billion or 38 per cent of total goods exports in August, of which €1.9 billion went to Belgium, €1.2 billion went to Germany and €1.3 billion went to the Netherlands. The US was the main non-EU destination, accounting for €5 billion (32 per cent) of total exports in August.

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Exports to Britain were €1.3 billion, which was 8 per cent of total exports in August. The products which accounted for the largest share of exports were chemicals and related products at €382 million, food and live animals with €315 million, and machinery and transport equipment with €240 million.

From January to August exports to Britain increased by €1.3 billion (up 11 per cent) to €12.7 billion when compared with the first eight months of 2022.

[ Manufacturing slows as exports hit by European customers cutting spending ]

However, Janette Maxwell, director in tax at Grant Thornton Ireland, noted that recent figures show a notable reduction in goods trade between Ireland and Britain.

“Imports from Britain to Ireland fell by 14 per cent to €1.8 billion in August 2023 when compared with August 2022. Exports from Ireland to Britain fell by 15 per cent to €1.3 billion in August 2023 when compared with August 2022,” she said.

Carol Lynch, BDO Ireland partner and head of customs and international trade services, said: “Whilst the trade with the UK has improved relative to the immediate aftermath of Brexit, traders need to be mindful of the border procedures that will be applied at the Britain border in early 2024.

“This will create friction, particularly for food exporters from Ireland to Britain, and it is important that Irish exporters continue preparing for this,” she said.