Trade surplus falls 41% to €2.9bn

Ireland’s seasonally adjusted trade surplus fell by 41%, to €2.9bn, in September — marking the first time the monthly surplus has been below the €3bn mark since last December.

The surplus had reached a high of €4.88bn in August.

Preliminary figures, published yesterday by the CSO, indicate that the value of Irish exports dipped by nearly €1.8bn — or 19% — to €7.31bn during September. This compared to a monthly high value of almost €9.1bn in August. Helping to drive down the trade surplus was a 5% monthly increase in import value to €4.41bn.

On a year-on-year basis, September’s export value fell by 6%, while imports grew 8%. The export fall — the first marked decrease since last April — was driven by a €1bn decline in chemical and pharmaceutical products, as had been anticipated following unusually strong growth figures in August.

Commentators anticipate a certain level of volatility in trade data over the coming months as an increasing number of pharmaceutical products lose their exclusive patents, but expect limited impact on multinational investment and job numbers.

The CSO data also showed that while the EU remains Ireland’s main trading region, the US and China are our main non-EU trade partners, particularly in terms of imports.

Reaction to the figures was relatively benign — with a near 10.5% increase in services exports also noted.

Chief economist at NCB Stockbrokers, Philip O’Sullivan, said: “In all, the year-to-date trade surplus stands at €32.5bn, up 2.2% on the same period in 2011, which represents a solid performance in light of both the well-documented problems being experienced by a number of Ireland’s key trading partners and input price pressures on the import side.”

Merrion Capital’s Alan McQuaid said that whether the weak September performance was a one-off remains to be seen, but if it’s not then it’s a serious cause for concern, significantly denting export growth and impacting negatively on GDP.

“Irish export growth, in 2012, looks set to be weaker than in 2011. We are currently forecasting a volume rise of 4.5% in goods and services — down from 5.1% in 2011, but pushing back up again to 5% in 2013 and 5.6% in 2014 all things being equal.”