Export surplus fell E1bn in June

David Clerkin

Official figures published yesterday showed trade figures took a sharp turn for the worse as exports tumbled and imports kept creeping up.

The Central Statistics Office (CSO) said the surplus of exports over imports tumbled from E3 billion to E2bn during June, which was the weakest figure since July 2000. However, the import figures were skewed by a surge in demand for cars and the delivery of new aircraft.

Imports of road vehicles were 20% higher at E1.9bn during June, but imports of other transport equipment, which includes aircraft, came in at E1.1bn during the month. This was almost 0.5bn higher than the same month last year.

Ryanair has signed deals with aircraft giant Boeing for 225 aircraft and options to buy a further 200. These are scheduled for delivery between 2005 and 2012. A new jet costs in the region of E30 million to E40m.

Total exports slid 11% on the previous month to E6.6bn, while imports recorded a 5% jump to E4.6bn.

Goodbody Stockbrokers economist Philip O’Sullivan said the figures showed exports in the first six months of the year were just 1.6% ahead of the same period last year, while imports had grown by 8.9%. “A buoyant appetite for consumer spending has made a major contribution to the rise in imports, while the escalation in energy prices has also played a significant role in this outcome,” he said.

Record oil prices were behind 20% of the increase in imports, said Mr O’Sullivan. Petroleum imports were E295m, or 37%, higher in the first five months of the year.

He said that the falling trade surplus was likely to hurt economic growth but that the individual performance of a number of sectors, including chemicals, which account for around half of all exports, was encouraging. “If this trend is maintained, the impact on growth will turn out to be much softer,” he said.

The Irish Exporters Association (IEA) also blamed high oil prices for hurting export figures.

“The falling export figures reflect the continued difficulties Irish exporters face from very high oil price pressures impacting on transport costs, energy costs and a wide range of raw material costs,” said IEA chief executive John Whelan.

The CSO figures also showed imports from Britain were 8% ahead in the first half of the year despite a softening of the euro against sterling, which made imports more expensive. Exports to Britain fell by 2%.