The value of exports fell sharply in April to their lowest level since October 2004, according to figures released yesterday by the Central Statistics Office (CSO). Analysts expressed pessimism about the outlook for exports in the coming year.
When adjusted for seasonal factors, the value of exports fell to €6,825 million in April from €7,551 million in March, a fall of 9.6 per cent on the month and 11.4 per cent lower than April 2005. A parallel fall occurred in imports, from €5,215 million in March to €4,569 million suggesting the April trade performance was heavily influenced by importing and exporting activity in the multinational sector.
But although both exports and imports fell in monthly terms, import growth in the first four months of the year was significantly stronger. In the year to April, exports were 2 per cent higher than a year before. This compared with 7.3 per cent growth in imports, driven by strong demand for cars and machinery.
The trade surplus for April was €2,256 million in seasonally adjusted terms, the second lowest level since March 2003. The balance of exports and imports for the multinational sector exceeded the trade surplus for the first quarter of the year, implying that imports exceed exports in more traditional, indigenously owned traded sectors of the economy.
Alan McQuaid of Bloxham stockbrokers said the euro/dollar exchange rate would be crucial for export performance. "With the euro set to make healthy gains against both the greenback and pound this year and next, the outlook for Irish exports in 2006 and 2007 is none too bright in our view". Mr McQuaid predicted that exports volumes - which adjust export values for changes in the prices of exports - would grow by 3.5 per cent his year and by 4 per cent next year. "Overall growth is likely to remain sluggish compared to the high growth rate of the past decade," he said.
Rossa White, economist with Davy, said declining competitiveness would affect the CSO's estimates for economic growth in the first quarter of the year.
