Exports hit record €13.7bn in January as reliance on UK declines

The value of Irish goods exports hit a record €13.7 billion in January while the UK accounted for less than 10 per cent of Irish exports for the first time, the latest trade figures show.

The record performance comes amid signs of a global slowdown in trade, threats from Brexit and faltering US-China trade relations.

The figures show seasonally adjusted goods exports grew by 6 per cent to €13.7 billion in January while imports fell by 25 per cent to €6.5 billion. This resulted in a record trade surplus of €7.2 billion, 72 per cent up on the previous month.

The main driver of the monthly surge in exports was organic chemicals, which rose by 45 per cent to €3.6 billion and accounted for 27 per cent of all goods exported in January.

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The Republic’s export trade is dominated by pharmaceuticals, which account for more than 60 per cent of total goods exports because of the strong multinational pharma manufacturing base here.

Exports to Britain fell marginally to just under €1.2 billion, accounting for 9 per cent of total exports in January. This is the first time on record that the UK, traditionally the Republic’s largest EU trading partner, has accounted for less than 10 per cent of exports.

The Government believes market diversification, in other words reducing the State’s reliance on the UK market, is key to managing the Brexit risk.

While this has been achieved in many sectors, the Republic’s food and drink trade is still heavily reliant on the UK and remains the most exposed to Brexit.

According to Bord Bia, some €4.5 billion or 37 per cent of all food and drink exports from the State went to the UK last year.

The latest trade figures show the EU accounted for just over €7 billion or 52 per cent of total goods exports in January of which €2.2 billion went to Belgium.

Antwerp is one of the largest global drug redistribution hubs and receives most of the State's pharma exports which are not destined for the US.

The US was the single largest export destination, accounting for €3.8 billion or 28 per cent of total exports in January.

The main driver of the decline in imports was medical and pharmaceutical products, which fell by 48 per cent to €544 million in January.

The figures show goods from the EU comprised 61 per cent of the total value of imports in January. Total imports from the EU of €4 billion represents an increase of €298 million (8 per cent) on the same period in 2018.

The US with €954 million (14 per cent ) and China with €465 million (7 per cent) were the largest non-EU sources of imports.

Commenting on the latest trade numbers, Cantor Fitzgerald economist Alan McQuaid said: "The positive start to the year augurs well for 2019 as a whole."

The latest trade numbers come in the wake of separate income data from the Central Statistics Office, which revealed the Republic's economy grew by 6.7 per cent last year thanks to a near 9 per cent jump in exports.

While several headline indicators pointed to a slowdown in activity in the final quarter last year, the value of exports rose by 5.3 per cent in the quarter.

This was at odds with the slowdown internationally, which has prompted the European Central Bank and the Federal Reserve in the US to rethink their interest rate policies.

Analysts believe the domestic pick-up may relate to several company-specific activities rather than trends internationally.