Surge in imports and fall in exports tightens Ireland's balance of trade

THE MERCHANDISE trade surplus narrowed sharply in April as imports surged and exports declined, according to preliminary figures released yesterday by the Central Statistics Office.

The seasonally adjusted value of exports fell to €7.5 billion from €7.7 billion a month earlier. It was the second consecutive month in which the value of exports fell on the previous month.

The value of imports, by contrast, soared in April to reach levels not seen since 2007. Imports reached €4.9 billion during the month, up from €3.7 billion in March.

More detailed figures were published for the first three months of the year. In the first quarter, the seasonally adjusted value of exports increased by 4.5 per cent on the previous quarter to total €23.4 billion.

On a year-on-year basis, exports grew by 9 per cent. This was driven by a rise in the export of medical and pharmaceutical products, which rose 18 per cent year on year. Organic chemicals also rose, gaining 15 per cent compared to 2010.

The economy exported more goods to two of its main export markets, with an additional €541 million, or 11 per cent, shipped to the US compared to the first quarter of 2010.

Goods exported to the UK rose by €259 million, or 9 per cent, between the first quarter of 2010 and the same period in 2011. France imported an additional 23 per cent, or €255 million, of Irish goods.

In the same period, exports to Spain declined by 21 per cent, or €194 million.

National Irish Bank chief economist Dr Ronnie O’Toole described the strength in UK exports as “surprising and encouraging”.

“While Irish exporters have been hit by the slowdown in retail sales in the UK in recent months, the very high rate of British inflation is a positive, as it is translating into higher prices and margins for Irish produce,” he said.

“Around half of exports from indigenous Irish exports is destined for the UK, and around nine out of 10 Irish companies sell some of their produce to the UK, so it remains a critical market for Ireland.”

Imports were down by 12 per cent, to €12.6 billion year on year in the first quarter.

Imports of petroleum products were up by 26 per cent, or €275 million, while transport equipment saw imports rise by 19 per cent or €167 million.

Car imports increased by a total of 36 per cent.