Decline in exports causes trade surplus to fall 11%

IRELAND’s trade surplus fell by 11% in October due to a 4% fall in exports as the value of imports increased by a similar level.

The latest preliminary external trade data from the Central Statistics Office (CSO) show seasonally adjusted exports fell by 4% in October to a value of €7.65 billion; import value was up by 3% to just over €3.9bn.

That movement led to a drop in the monthly trade surplus from €4.2bn in September to €3.7bn in October. Unadjusted, October’s export value was unchanged at €7.52bn, while import value rose 7% to €3.9bn.

The CSO also noted yesterday that Irish export value grew by 4% to €69.4bn in the first nine months of this year, while import value grew by 6% to €36.2bn.

Experts suggested the latest monthly external trade figures don’t offer clear evidence of a slowdown in Irish export performance.

“Not only are the monthly Irish export figures extremely volatile, but they don’t tally with the actual contribution of the export sector to GDP growth,” said Conall MacCoille, chief economist with Davy Stockbrokers.

“Monthly figures capture the value of goods transported across the border, rather than the value-added contribution of exports to GDP growth.”

Mr MacCoille said that while weaker demand from Ireland’s eurozone neighbours presents “a downside risk” to growth in the export sector, the data don’t “form a clear trend” yet.

“We’ll need to wait until the national accounts before the trends in Irish export growth in the second half of 2011 become apparent,” he said.

Meanwhile, Bloxham Stockbrokers stated: “Despite the slowdown in the Irish economy, it’s clear that Ireland has a very healthy and dynamic export model. And overall it is, in our view, in a much better position than other eurozone ‘peripheral’ debt countries to move forward once world growth picks up again.”

The eurozone economic forecast from Ernst & Young backs up that claim. Published yesterday, the report states that of the 17 eurozone economies, Ireland is the fastest growing and “remains on track to experience one of the strongest rebounds across the eurozone”.