Exports fell 9% in June from record high in May

Exports fell 9 per cent in June from this year's record high in May, continuing the up and down pattern seen in previous months.

Seasonally adjusted exports stood at €7.3 billion in June, down from €8 billion in May, the latest trade statistics from the Central Statistics Office (CSO) show. Meanwhile imports increased by 4 per cent, to almost €5 billion. As a result the seasonally adjusted trade surplus fell to €2.4 billion in June from €3.3 billion the previous month. On an unadjusted basis, the value of exports was up €68 million at €7.8 billion in June, while the value of imports was €162 million ahead, at €4.8 billion.

"Export growth remains disappointing in the context of healthy growth in global trade," said Rossa White, an economist at Davy, who attributed the decline in part to the competitive pressures faced by Irish business.

"Exporters have not been aided by recent trends in price inflation and wages, as they attempt to regain lost market shares." The CSO figures, released yesterday, give only a preliminary figure for June, but have a more detailed breakdown of the performance from the start of the year until May, a month when exports jumped 17 per cent on a seasonally adjusted basis.

In the five months to the end of May, exports were up by 4 per cent on an unadjusted basis, helped by a 12 per cent increase in exports of medical and pharmaceutical products. The value of metallic elements leaving the country was 69 per cent ahead of the year-earlier period, while organic chemicals exports slipped 8 per cent.

Exports to the US increased by 5 per cent, while goods destined for Germany were up 12 per cent.

However, exports to the UK slipped 5 per cent, while goods destined for Switzerland were down 38 per cent.

"Overall export performance in the first half of 2006 has improved somewhat," said Alan McQuaid, chief economist at Bloxham. "For the remainder of the year, the outlook for external demand remains reasonably positive with available indicators pointing to fairly strong growth in most of Ireland's leading export markets."

However, he warned that the exchange rate would be key in determining how competitive Irish exports remain in the future. "Ireland's competitive position has deteriorated in recent years and the new proposed national wage deal is not going to make life any easier for the exposed sector in our view," he said.