External trade surplus rises 34%

The value of exports fell 3 per cent in 2009, led by a decline in demand for computer equipment amd electrical and industrial machinery, new figures from the Central Statistics Office showed today.

However, a decline in value of imports of more than 20 per cent gave rise to a trade surplus of €38.6 billion, 34 per cent higher than in 2008.

Exports were worth €83.4 billion last year, down from €86.3 billion in 2008.

Computer equipment fell 28 per cent to €6.6 billion, while electrical machinery decreased from €4.7 billion to €3.3 billion, a decline of 31 per cent. Exports of general industrial machinery declined 29 per cent to €862 million.

This was offset by a rise of 17 per cent in exports of medical and pharmaceutical products, which rose to €19.5 billion, and a 2 per cent increase in the exports of organic chemicals, which totalled €18.2 billion last year.

Some of the largest declines were seen in the market to Britain, which fell 15 per cent from €14.3 billion to €12.2 billion. Exports to Germany also fell, declining 21 per cent to €4.8 billion.

However, Ireland increased exports to Belgium by 20 per cent, totalling €14.6 billion, and by 5 per cent to the US, which reached €17.5 billion.

The value of imports fell 22 per cent from €57.5 billion in 2008 to €44.8 billion last year, as demand fell for cars, petrol and computer equipment fell. The value of imported road vehicles plunged 72 per cent to €892 million.

Bloxham's chief economist Alan McQuaid said much of the performance could be attributed to the weakness in imports rather than the strength of exports.

Meanwhile, preliminary estimates for January 2010 showed exports were 3 per cent lower at €6.7 billion compared to a year earlier. However, imports were 16 per cent less for the month, totalling €3.3 billion.

Seasonally adjusted figures show exports for January 2010 were €6.9 billion, a rise of 15 per cent compared to December 2009, while imports dipped 9 per cent to €3.1 billion.

Bloxham's Alan McQuaid described January's export performance as "a strong start" to the year

"Seasonally-adjusted exports increased by 14.7% in January relative to December while imports fell by 8.9%. The net result was another healthy trade surplus, of €3.7 billion, up from a positive balance of €2.5 billion in December. Furthermore, it was the highest surplus since last June," he said.

He said the 2010 outlook for merchandise exports depended heavily on external markets and demand, and the performance of sterling.

"It is quite clear at this stage that Ireland's export sector will be the key player in the Irish recovery story over the next few years. The trade performance last year was quite impressive by international standards, but we cannot afford to rest on our laurels and assume everything will be ok as the US economic picture improves," he said.

"Further significant cost adjustments need to be made so that a leaner and meaner Irish export model can maximise the potential external trade gains for the country going forward. As regards 2010, another record trade surplus is projected, of over €40 billion, which will help to limit the overall contraction in GDP this year."