Exports and imports rose slightly in December compared to the preceding month, but were lower than a year ago according to the latest external trade statistics, writes Marc Coleman, Economics Editor.

However, analysts said the annualised fall was strongly influenced by the falling value of the dollar, rather than any drop in export demand.

According to Central Statistics Office (CSO) data published yesterday, the value of exports in December was €7.23 billion, down 3 per cent on the €7.418 billion on December 2005. This ends a disappointing year for exports.

With December figures subject to revision, revised data for the January to November period give the latest reliable picture of trade trends, suggesting that exports grew by only 3 per cent over this period.

The result for December suggests the final figure for the full year will be somewhat lower. Describing export performance for the full year as "disappointing", Goodbody economist Dermot O'Leary attributed the poorer than expected performance to slowing growth in the chemicals sector.

"Given that this one category alone accounts for just short of half of total exports, its performance obviously has a large bearing on the overall trade performance," Mr O'Leary said yesterday.

But Davy economist Rossa White said Ireland's exports were performing better than the figures suggest.

"About 75 per cent of Irish goods exports are priced in dollars. The dollar fell sharply against the euro, by almost 8 per cent year-on-year. That was its biggest quarterly drop in two years. Taking into account the decline in the price of exports, volumes increased at least per cent year on year in the fourth quarter," Mr White said yesterday.

Exports still exceeded imports substantially, by €2.1 billion, in December.