Irish trade surplus narrows in May

Ireland’s trade surplus narrowed by €627m in May, on the back of a 5 per cent decline in exports and a corresponding rise in imports.

According to figures published by the Central Statistics Office on Tuesday, exports fell by 5 per cent, or € 437m, to €9bn in May, while imports rose by 4 per cent, or €190m, to €5bn in the month. This pushed the trade surplus down by €627m, or 14 per cent, to €3.9bn in May.

Merrion Capital economist Alan McQuaid said that the figures showed “another healthy seasonally-adjusted merchandise trade surplus, although not as high as we had anticipated.”

The figures for May are the first time that the CSO has incorporated data from the aircraft leasing sector in Ireland. Ireland is one of the top global hubs for aircraft leasing, and according to the CSO, when an Irish based lessor buys an aircraft, it is treated as an import, even if this aircraft is then placed on a short-term lease of five or six years or so with an airline somewhere else in the world. When the aircraft is sold, it is treated as an export, although the CSO will also treat longer-term leases of 20 years or so an export.

Exports

On annual basis, exports rose by 8 per cent when compared with May 2014, driven by an increase in the exports of medical and pharmaceutical products, which were up by 30 per cent, or by €542m, to €2.4bn in May 2015.

When aircraft exports are excluded, exports actually rose by 11 per cent in the year to May 2015.

Conall Mac Coille, economist with Davy Stockbrokers, said that the “broad based expansion in Irish goods exports no doubt reflects the weakness of the euro accompanied by strong UK demand”.

Noting that goods exports to the UK have grown by 8.2 per cent in 2015, Mr MacCoille said that exports to the euro-area have also grown, by 19.3 per cent, while exports to the US are up 24 per cent.

The EU remains Ireland’s largest trading partner, accounting for 54 per cent of total exports in May 2015, some 14 per cent of which went to Belgium.

Outside of the EU, the US was the largest market for Irish exports, accounting for 26 per cent of total exports in the month.

Imports

When considered on an annual basis, imports fell by 2 per cent, or €110m, in the year to May 2014, down to €4.7bn. However, when aircraft leasing data is excluded, imports actually rose by 5 per cent in the year to May 2015.

During May 2015, imports of medical and pharmaceutical products increased by € 64 m (+17%) to €444 million while there was no change in the imports of organic chemicals. The imports of miscellaneous manufactured articles increased by € 73m (+14%) to € 593m.

Some 61 per cent of imports originated in the EU in May 2015, with 29 per cent of total imports coming from Great Britain. The USA (14%) and China (7%) were the main non-EU sources of imports.