Export growth under threat

EXPORT performance, which is generally viewed as the main driver of growth for the economy, is likely to be less impressive than initially forecast.

In its third quarter review published yesterday, the Irish Exporters’ Association (IEA) said that the knock-on effects of the ongoing eurozone debt crisis — chiefly more business uncertainty and weakening in global consumer confidence — hit exports hard in the last three months. This resulted in total Irish export growth of just 1.7%, year-on-year.

The export of manufactured goods fell by 3%, on a year-on-year basis, during the quarter. On the back of those figures, the IEA expects total export growth of 5% for 2011, rather than its original forecast of 7%.

John Whelan — IEA chief executive — said that the poor showing in the third quarter shouldn’t detract from the positive growth posted in the year to date; but warned that more attention should be paid to pushing exports to emerging markets.

The IMF has already forecast a slowdown to 3.5% in global trade — based on emerging economies growth trade and developed markets slowing down.

“The fact that the EU and the US markets currently account for over 80% of Irish export sales dramatically illustrates the need for a sustained and targeted approach to developing sales in the emerging markets, especially in the BRIC (Brazil, Russia, India and China) countries,” Mr Whelan said.

Mr Whelan added that the Government and state agencies need to be “extraordinarily supportive” of business to ensure that export growth continues.

“I have no doubt that a premium return can be expected from increasing support to exporters to expand in the fast growing emerging markets, particularly the BRIC economies,” he said.

“A weak and bumpy recovery seems to be emerging in global trade and the Irish export industry will need to diversify its export client base to include a higher level of sales to emerging markets.

“It is in these emerging markets that economic growth is strongest and it is these markets which are least affected by sovereign debt and banking concerns,” he added.