Figures show exports drop by 12% in May

THERE was a pronounced reversal of April’s strong export and trade surplus readings in May due mainly to the weakness of the US dollar against the euro.

While April external trade figures from the Central Statistics Office (CSO) detailed a 5% year-on-year rise in the value of exports from Ireland and a trade surplus of nearly 4 billion; new preliminary figures from the CSO yesterday, showed that it was an entirely different story in May.

That month saw a 12% drop in export value, compared with to April and an 8% annualised decline. The value of imports – on a year-on-year basis – were down by 22% in May. Meanwhile, Ireland’s trade surplus – basically, the value by which exports exceed imports – rested at 2.86bn (on a seasonally adjusted basis) compared withto 3.86bn in April. “Irish goods exports held up remarkably well during the collapse in global trade last year and in early 2009.

That showed in April when the value of goods exports from Ireland reached a record high of 7.8bn. Yet exports slipped back to 6.8bn in May,” said Rossa White, chief economist with Davy Stockbrokers. “There is an obvious explanation for part of the slippage. More than 75% of goods exports are priced in dollars, thanks to the domination of US-owned multinationals in Irish manufacturing. The dollar fell sharply against the euro by 7%, month-on-month, in May compared with April. This directly reduces the value of exports translated into euro,” he added.

Although a full breakdown of May’s external trade figures aren’t due for another month, yesterday’s CSO details showed the first four months of the year have been good for Irish exports – the value of which increased, on an annualised basis, by 3% to 29.66bn.

This was helped by strong increases in the export of medical/pharmaceutical products, electrical machinery and computer equipment.

Between January and the end of April, there were also strong increases in Irish exports to the US and parts of Europe, although exports to Britain were down by 7%. The

value of imports, meanwhile, over the course of the first four months of the year, were down by 21% to 16.2bn on a year-on-year basis.