Trade surplus grows as imports fall

THE TRADE surplus continued to widen in October, as weakened domestic demand meant fewer goods were imported.

According to the latest data from the Central Statistics Office, seasonally adjusted exports fell by 2 per cent between September and October to €7.6 billion, while imports decreased by 11 per cent to €3.5 billion.

This increased the seasonally adjusted trade surplus of 8 per cent to €4.1 billion. The trade in goods surplus has grown from €1.7 billion in January 2008.

“The recent data flow on the international economy bodes well for Irish trade performance. Markets are increasingly coming to the conclusion that the global recovery is under way and built on firm foundations,” said Davy analyst Conall Mac Coille in a note.

“That said, fiscal adjustments in the UK and euro area in 2011 may mean that demand for Irish exports may falter a little, but overall the prospects for Irish export growth look reasonably promising.”

Between January and September, exports rose 3 per cent, or €2 billion, to €66.8 billion. This was driven by an increase of 13 per cent, or €2.2 billion, in medical and pharmaceutical products. Metalliferous ores and scrap metal also showed an increase in exports, rising 83 per cent, or €298 million. This was partially offset by a decline of 32 per cent in the export of computer equipment. The export of other transport equipment fell by 72 per cent, or €462 million.

Ireland’s biggest export markets in the first nine months of the year were the US, at €15.5 billion; Belgium, at €10 billion; and Britain, at €9.1 billion.

Minister for Trade Billy Kelleher said the figures showed the “reassuring positive trend” in the growth in exports over recent months has been maintained. “Significantly an analysis of trends between January and October of 2009 and 2010 shows that our merchandise exports increased by 4.51 per cent, or €3.223 billion to €74.66 billion,” he said.

Petroleum imports rose by 36 per cent; medical and pharmaceutical products imports rose by 27 per cent; and road vehicles were up 73 per cent. “The bottom line is that the export sector offers the one ray of light at the moment in a fairly gloomy economic picture, and will be the key driver of the Irish recovery story in the years ahead,” said Bloxham economist Alan McQuaid.