Ireland hits record trade surplus

Ireland generated a record high annual trade surplus of just under €44.7bn in 2011, up by 3% on 2010.

The increase comes despite a fall off at the end of the year, with the monthly surplus falling by 23% in December. Exports for 2011, as a whole — according to new figures published yesterday by the CSO — were valued at over €92.9bn, up 4% on 2010 levels, while import value rose by 5% to €48.24bn.

While the US, Belgium, Britain and Germany were Ireland’s main export markets, last year, exports to key target countries — such as Brazil, Russia and India — rose significantly (20%, 37% and 34% on 2010).

The latest CSO figures also show a good start to this year for Ireland’s export performance — preliminary figures showing a 10% year-on-year rise in value, to nearly €7.7bn. According to Jobs, Enterprise and Innovation Minister, Richard Bruton, this confirms there is potential for wider recovery.

“Despite the warnings of some commentators about our exports, recent weeks and months have seen some encouraging signs in the global economy, as well as some further signs that the Irish economy has stabilised and is returning to sustainable growth,” he said.

Alan McQuaid, chief economist with Bloxham Stockbrokers, hailed the January data, as “very positive” and “better than expected” and said that the performance suggests another year of record trade surplus could be on the cards for Ireland in 2012.

“Amid the moderation in external demand, some loss of momentum in Irish merchandise export activity is expected in the short-term. Nevertheless, we believe that, as was the case during the 2009 collapse in global trade flows, the sectoral composition of external demand will shift in favour of goods which Ireland specialises in, especially the likes of pharmaceuticals. As well as that, merchandise export activity looks set to be supported by ongoing competitiveness gains,” he said.

However, Davy Stockbrokers was less enthusiastic — saying the figures give a poor guide to the final goods export contribution to Irish GDP movement.

According to Conall MacCoille, Davy’s chief economist: “The monthly trade data indicates that exports rose by 4.8% in the fourth quarter of 2010, but GDP data indicates that goods exports fell by 5.5% in the same period. The latest release gives us no detail on the traded services sector, which accounts for 50% of exports.

“So, we can infer little from the latest trade data release about the strength of the export sector ahead of next week’s GDP data for the fourth quarter of 2011.”