Global downturn hits Irish exports

IRELAND’S TRADE surplus narrowed to €3.7 billion in October as exports retreated and imports ticked higher.

The decline comes after the trade surplus recorded a record high of €4.7 billion in September.

The data from the Central Statistics Office showed seasonally-adjusted exports declined 4.5 per cent in October while imports increased by 2.6 per cent.

On an unadjusted basis, exports in October were worth €7.52 billion, unchanged from a year earlier, while imports were €3.89 billion, a rise of 7 per cent.

In the first nine months of the year, exports rose by 4 per cent to €69.43 billion. That was driven by exports of medical and pharmaceutical products, which rose by 11 per cent or €1.9 billion.

Organic chemicals were 10 per cent higher, and petroleum exports grew by 51 per cent or €325 million.

Goods exported to the US grew by 4 per cent, a region that still accounts for the majority of Ireland’s exports. Imports rose by 6 per cent to €36.19 billion over the nine-month period.

Analysts had been expecting the decline, with the global slowdown hitting the export market.

Bloxham chief economist Alan McQuaid said the overall data was “solid”, given the economic backdrop.

“The bottom line is that Ireland’s external trade performance has held up remarkably well in the year to date, which is why we’ve pushed up our overall GDP growth forecast for 2011 to 1.1 per cent from 0.8 per cent previously,” he said.

“But the worry is now that export growth will weaken in the coming months on the back of the deteriorating world economic backdrop, and a fall-off in global demand, hampering Ireland’s recovery prospects in the process.”