Ireland set for record trade surplus in spite of fall

Ireland should generate another record annual trade surplus despite data showing a monthly decline.

CSO data shows the trade surplus slipped to €3.62bn in February, down from €3.82bn in January. This marginal dip came about due to a seasonally adjusted decline in both exports and imports, during the month — exports falling in value by €1.05bn, with import value falling by €856m.

EU countries accounted for €4.6bn — or 62% — worth of Irish exports in February, with chemical-related products accounting for 60% of exports.

“Despite the various concerns and the fall back in the February balance, the data for the first two months of 2012 were very positive and, even allowing for the difficult global economic backdrop, suggest that yet another record trade surplus could be on the cards this year,” said Alan McQuaid, chief economist with Bloxham Stockbrokers.

He expected Ireland’s trade surplus for 2012 to come in at about €46bn, up from the €44.7bn record figure registered last year.

“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.

“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.”

According to the CSO figures, the first two months generated export value of just under €15.1bn, with imports worth €8.4bn.

Davy Stockbrokers said the figures did not change its view that “Irish export growth will slow sharply in 2012”.