Trade surplus falls below €3bn mark

Ireland’s seasonally adjusted trade surplus slipped for the second consecutive month in January, with preliminary figures from the CSO showing a 5% fall to €2.9bn.

It marks the first time the surplus has been below the €3bn mark since last September.

Yesterday’s weaker-than-expected trade figures detailed a 0.5% — €35m — increase in export value to €6.85bn for the month; but also a 5% — €179m — rise in import value to just over €3.96bn.

On a year-on-year basis, January’s export value decreased by 12% to almost €6.8bn, driven by significant falls in exports in medical and pharmaceutical products and organic chemicals sectors. January also saw an annualised fall of 1% in import value to €4.42bn.

The EU was the main source of trade activity for Ireland during the month — accounting for 62% of imports and 56% of exports. The US was the main non-EU destination for Irish exports, accounting for 24%, or €1.61bn worth.

David McNamara of Davy Stockbrokers said the slowdown in export performance will only have a limited impact on the domestic economy, “given the disconnect between the mainly multinational exporting sector and the domestic economy”.

“For example,” he added, “the pharmaceuticals sector accounts for 10% of GDP, but employs just 22,000 people.”

Alan McQuaid — chief economist with Merrion Stockbrokers — said the main positive for Irish exports remains the strong performance in the services sector. However, he added that overall Irish export growth figures for 2012 are likely to be weaker than the previous year.

“We are forecasting a volume rise of 2.9% in goods and services, though pushing back up again to 4% in 2013 and 5.5% in 2014, all things being equal — with the services side providing the main positive momentum.

“However, the risk is that growth will be weaker than this, with the recent trend in merchandise exports a cause for concern,” he added.

NCB Stockbrokers’ Emmet Gaffney, meanwhile, said that Ireland’s goods surplus has remained resilient in the face of challenges being faced by many of the country’s largest trading partners.