Irish trade surplus cut by 10% in December

IRELAND’S TRADE surplus narrowed in December as the value of imports rose 12 per cent on November.

The seasonally adjusted figures showed exports remained relatively unchanged month on month, at €7.64 billion, but imports rose to €3.9 billion. This cut the trade surplus by 10 per cent to €3.7 billion.

On an unadjusted basis, the value of exports in the month rose 21 per cent compared to a year earlier, and imports were 8.8 per cent higher. The unadjusted trade surplus was up €930 million to €3.2 billion for December, and reached a new record of €44.7 billion for the year.

Minister for Enterprise, Trade and Innovation Mary Hanafin welcomed the figures, saying they built on the export success achieved throughout the year.

“This achievement by our exporters is to be commended particularly given the extremely difficult and competitive trading circumstances in which they operate,” she said.

More detailed figures, available only to November, showed that in the year to that month exports rose by 6 per cent compared to the same period in 2009 and that this was driven partly by the pharmaceutical industry. This sector exported goods worth €2.85 billion more in January-November 2010 than in the comparable 2009 period, a rise of 14 per cent.

Exports of organic chemicals rose by 8 per cent or €1.3 billion.

However, this increase was partially offset by a decrease in the export of computer equipment of €1.8 billion, or 31 per cent.

“Back in 2001-2002, Irish exports were dominated by the production of office machinery, which accounted for over €20 billion in exports,” National Irish Bank’s chief economist Dr Ronnie O’Toole wrote in a note.

In the first 11 months of 2010, office machinery accounted for only €4 billion worth of exports. The closure of Dell’s Irish manufacturing facility was one of the structural factors that led to the very large decline. Exports of transport equipment were down by 69 per cent or €479 million.

Imports, meanwhile, were down 0.2 per cent over the period, to €41.3 billion. Imports of transport equipment were 35 per cent lower, while computer imports declined by 29 per cent or €983 million.

Imports of petroleum products were up 28 per cent, while vehicle imports rose by 76 per cent.

Irish exports went mainly to the US, Belgium, Britain and Germany, which accounted for 60 per cent of the total value of exports for the first 11 months of 2010. Ireland’s main import markets were Britain, the US, Germany and China.

Bloxham chief economist Alan McQuaid said the trade figures were “very positive”, although growth was slightly lower in the final quarter of the year.

“Looking at the monthly trade figures, merchandise export growth moderated somewhat in the final quarter of 2010 reflecting adverse weather conditions, which are likely to have disrupted transportation, together with weakened external demand, as signalled by the loss of momentum in the global measures of world trade volumes,” Mr McQuaid said.