Exports boost for trade surplus

NOVEMBER saw a marked recovery in Ireland’s trade surplus, with a strong export performance pushing it up to €4.3 billion, its highest level ever.

According to the latest Central Statistics Office figures, Irish export value rose — on a monthly basis — by 5% in November, to €8bn. Coupled with a 6% fall in import value, to €3.7bn, this resulted in the record trade surplus.

However, commentators — noting recent predictions that export performance is likely to slow this year — warned that the sector cannot be solely relied upon for economic growth. Illustrating the fragility at play, October’s external trade figures showed an 11% monthly fall in the trade surplus to just over €3.7bn, on back of a 4% fall in export value.

“Exports are continuing to play a key role in restoring Ireland’s competitiveness and these figures are good news for business,” said Ian Talbot, chief executive of Chambers Ireland. “However, with the current uncertainty in the eurozone, and in our key export market in the UK, recovery will not come solely from external trade. The domestic economy must also be supported if we are to recover.”

Mr Talbot added that the Government needs to back up its recent talk and formally introduce a partial loan guarantee scheme and labour market reforms.

“We now need real focus on execution and delivery of these initiatives,” he added.

The fine print from the November data shows good gains in the export of food, dairy products and medical/pharmaceutical goods, as well as a monthly increase in exports to the key emerging so-called BRIC nations of Brazil, Russia, India and China.

Davy Stockbrokers’ chief economist, Conall MacCoille, noted that there has, so far, been little impact of the eurozone slowdown on Irish export performance.

“Clearly, weaker demand from the euro area presents a downside risk to growth in the Irish export sector. The specialised nature of Irish exports into niche sectors, and improvements in competitiveness may have softened the blow of the euro area slowdown.”

Alan McQuaid, chief economist with Bloxham Stockbrokers, said that, based on the November figures, Ireland’s overall trade surplus in 2011 should amount to around €45bn; a new record annual high, up from the previous record of €43.4bn, posted in 2010.