Trading to be impacted by unrest across Europe

The growth of Irish exports is expected to decline sharply this year as the European crisis continues to cause havoc in Ireland’s main trading partners.

Despite strong growth in the performance of Irish exports in the first quarter, with goods and services growing 3.6%, the chief executive of the Irish Exporters Association, John Whelan, does not expect the next three quarters of the year to maintain this level of growth.

“The return to recession in the eurozone, which accounts for 39% of our goods exports and 35% of services exports, has impacted on our exports in the first three months of the year,” Mr Whelan said.

“The turmoil in the eurozone economies will have a severe impact on our ability to expand exports over the next three quarters of 2012.”

Mr Whelan said the return of recession to Europe could spread across the Atlantic and effect the US recovery.

The US economy accounts for 23% of Irish goods exports and 7% of services exports.

Meanwhile, there was good news from the British market as Irish exporters capitalised on a weak euro to grow exports by 19% in the first quarter. However, exporters said the rapid price rise in diesel and other heavy fuels in recent months was taking its toll on the costs of getting goods to market and would inevitably act as a drag on manufacturing exports.

The first quarter also showed strong growth from exporters to the emerging BRIC countries. Irish exports to Brazil were up 32%, there was a 32% increase in exports to Russia, and India was up by 14%.

The Chinese market for Irish exports actually declined 5% but the recent trade missions are expected to return this to growth within the year.

However, Ireland is coming from a low base. Only 4% of Irish exports go to BRIC economies. The average EU country is exporting over 20% of their total exports to the BRIC nations.

Mr Whelan said Ireland should target African and emerging markets to boost exports.

“One way to escape the impact of a recession-ridden Europe is toaggressively focus our export promotional effort on the fast growing emerging markets, not just the BRIC economies, but also on fast growing African markets, middle eastern and South American markets.

“Such an approach would, in the longer term, ensure a more sustainable high level of export growth and with it more rapid jobs growth and a buoyant economy.”