Value of exports falls to lowest level in two years as EU demand weakens
THE VALUE OF goods exports fell to its lowest level in more than two years in the second quarter of 2012, new figures confirmed yesterday.
In the three months to June, Irish exporters shipped just under €22 billion worth of goods abroad, according to the Central Statistics Office. The value of exports in the first three months of the year was €1.3 billion higher.
The figures are adjusted for seasonal fluctuations.
The monthly trade data also recorded a decline. Exports in June stood at €7.4 billion, down €126 million on May.
The decline is broad-based and not concentrated in any one sector.
Exports of chemicals and pharmaceuticals, which account for more foreign sales than all other types of goods combined, declined by €200 million, to stand at €13.4 billion. This relatively small decline may allay concerns that the sector will shrink drastically following the ending of patents at the end of 2011 on a number of blockbuster drugs manufactured in Ireland.
Weak demand in continental Europe – Irish exporters’ main markets – accounted for most of the decline in exports between the first and second quarters.
Sales to Britain fell marginally while a small increase was recorded in the value of exports sold to North America.
Goods imports also fell in the second quarter of the year.
Irish residents purchased €12.5 billion worth of goods from abroad in the April-June period. The import bill in the first quarter was more than €1 billion higher.
On a monthly basis, imports declined by €100 million, to just under €4 billion.
Unlike goods exports, imports remain around one-fifth below their pre-2007 peak, reflecting the large declines of purchasing power of Irish residents.
The trade gap – the difference between exports and imports – stood at more than €10 billion in the second quarter. This was smaller than in the first quarter because export revenue declined by more than spending on imports.
Since the 1990s, Ireland has run one of the biggest trade surpluses in the developed world. This owes to its comparatively large manufacturing sector and the high level of value that is added to goods made in Ireland. This is particularly pronounced in the chemicals and pharmaceuticals sector.
That sector has grown so large that its export revenues now exceed the entire economy’s spending on imported goods.