Trade surplus at lowest level since 2008

The value of Irish exports fell 5 per cent or €4.798 billion last year as pharmaceutical and medical exports were hit hard by the expiry of key patents.

Figures published by the Central Statistics Office this morning show imports were up 1 per cent to €49.635 billion in 2013, resulting in a 12 per cent fall in the trade surplus to €37.255 billion, the lowest annual figure since 2008.

But preliminary estimates show the seasonally-adjusted trade surplus rebounded in December, rising sharply to €3.44 billion. This marked an increase of €891 million on the revised figure for November, the lowest monthly trade surplus since August 2008.

The December surplus was the second highest in 2013, after March.

Seasonally adjusted exports rose 11 per cent in the month to €7.745 billion, while seasonally adjusted imports fell 3 per cent to €4.304 billion, following monthly rises in October and November.

On an unadjusted basis there was a surplus of €2.232 billion in December, €171 million higher than the figure for December 2012.

The value of Irish exports in December was up 14.1 per cent, or €816 million, compared with December 2012, driven primarily by a 42.8 per cent increase in exports of medical and pharmaceutical products.

“Exports from this sector remain erratic,” Merrion Stockbrokers’ economist Alan McQuaid cautioned. “With the industrial output figures for December falling back on November, we would expect this to be reflected in weaker exports in January.”

Year overall

Exports of medical and pharmaceutical products were hardest hit sector for the year overall, down 12 per cent or €2.934 billion. Exports of organic chemicals were also down by 9 per cent or €18.291 billion, and petroleum by 53 per cent or €824 million.

The sector to experience the biggest increase in exports in 2013 was food and live animals, which saw an increase of 8 per cent to €616 million.

The US was Ireland's biggest export market in 2013, receiving 21 per cent of the total value of goods leaving the country, followed by the UK at 14 per cent, Belgium at 13 per cent and Germany at 8 per cent. The four markets combined accounted for 56 per cent of the total value of Irish exports.

Imports of pharmaceutical and medical products rose 8 per cent or €345 million in the year to €4.509 billion, while imports of food and live animals also rose 8 per cent, to €6.050 billion.

The UK provided 32 per cent of the total value of Irish imports in 2013, followed by the US at 11 per cent, Germany at 8 per cent and China at 6 per cent.

Mr McQuaid said weak global demand had hit Irish exports in recent years, but there were signs that the world economy is beginning to recover, “which augurs well for Irish exports in 2014”.

“This should to some degree offset the negative drag from the patents expiry issue on certain pharmaceutical products,” he said.

The pharmaceutical sector accounts for around a quarter of total Irish exports and half of merchandise exports. A research paper published by the Department of Finance last year concluded that Ireland would continue to feel the negative impact of the patent cliff in years to come, yet not as strongly as in 2012.

Merrion Stockbrokers have projected a volume increase in Irish exports of 3 per cent for 2014, with a merchandise trade surplus of €39 billion.