CHEMICALS and machinery, including computers, accounted for almost 60 per cent of exports this year, according to the Irish Exporters Association (IEA). It said the foreign owned sector - mainly chemicals and computers - made a strong contribution to exports.

The association is predicting that next year will be another good one for exporters but has warned that they should continue to hedge against currency fluctuations.

The latest available figures for exports show a value increase of 12.9 per cent over 1995. "The figures are lower than the spectacular increase of 20 per cent (by value) achieved in 1995, but can be considered an excellent performance after a slow start in the early months of the year," the IEA said.

It said the figures reflect problems in the beef trade, a slowing down of high technology exports against 1995's performance and increased competition in the UK and other markets serviced by the indigenous manufacturing sector.

The association said EU member states bought 70 per cent of all our exports. Britain, Germany and France now account for nearly 50 per cent of all our exports. If the Benelux countries are included the percentage goes to almost 60 per cent.

The US accounted for just under 10 per cent of exports.

"Currency exchange rates continued to pose problems for exporters throughout the year," the IEA said. "The relief which came about with the strengthening of sterling in the latter part of the year was more than offset by the appreciation of the pound against all the currencies in the European Monetary System, as it seemed that the Central Bank decided to shadow sterling."

The IEA said for exporters affected particularly those selling to France and Germany - this meant a drop in receipts of up to 12 per cent.

"Looking ahead to 1997, the outlook seems broadly favourable, with the Central Bank predicting an increase of 13 per cent in merchandise exports," the association said.

It said the British economy will continue to strengthen, with a return to growth forecast for Germany and accelerated growth in France. "Irish exports will continue to benefit from overseas investment and increased capacity," it said.

However, it warned that competition from other countries - especially Asia and Eastern Europe - would continue to increase.