Trade surplus dips 3% as exports fall

Ireland’s seasonally adjusted trade surplus dipped by 3% to just under €3.2bn in September, according to latest preliminary CSO data.

The decline came about due to a 5% (€364m) drop in the value of monthly exports to €7.31bn, while import value decreased by 6% to €4.12bn.

The monthly trade surplus has only dipped below the €3bn mark twice this year in January and June.

The latest Central Statistics Office external trade data also shows that exports fell by €118m (2%) on a year-on-year basis during September; driven by a near 70% fall in the value of petroleum product exports and a 17% drop in pharmaceutical goods.

Destination-wise, the European Union accounted for 56% (nearly €4.2bn worth) of total Irish exports, during the month, with the US the main destination outside of that accounting for 23% (just shy of €1.7bn).

However, despite the negative end to the third quarter, the three months to the end of September actually saw a 4.9% increase in Irish goods exports, leading to hope that GDP during the quarter should have been boosted as a result.

“The worst of the patent cliff looks to have affected the trade numbers at the turn of the year, but more hits cannot be discounted in the short-term.

“More importantly, the upturn in the global cycle bodes well for exports from the wider manufacturing sector,” noted David McNamara of Davy Stockbrokers.

“Moreover,” Mr McNamara added, “the healthy industrial production data in October point to a continued positive momentum in the export sector at the start of the fourth quarter.

“Of course, further hits to the numbers from the pharmaceutical patent cliff cannot be discounted. However, it now appears that the biggest hit to exports from the pharma sector occurred at the turn of the year.”

That said, Davy is still forecasting a marginal slowdown in overall export performance this year, with 1% growth likely — down from 1.6% last year — before a fuller recovery, to 3.1%, in 2014, “as the patent cliff washes through the national accounts”.


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