Trade surplus rises in March

The seasonally adjusted trade surplus rose last month as exports increased by 4 per cent and imports declined by 2 per cent compared with February.

But the figures were lower compared with March 2012, with value falling by 8 per cent and volume down 6 per cent.

This was driven by the decline in the chemicals sector, which has been affected by the loss of lucrative patents.

Although Merrion Economics said the figures were this morning were “stronger than expected”, economists cautioned on the sustainability of the contribution from the chemicals sector.

“Output from this area tends to be quite erratic at the best of times due to company-specific developments in patents and product cycles,” Merrion economist Alan McQuaid said. “ Indeed, industrial production data for the last few months suggest that the expiry of patents in certain pharmaceutical products is now impacting negatively on output.

Over the quarter, goods exports were down almost 5 per cent on the preceding three-month period, but the pace of decline slowed from the final quarter of 2012 and began to show signs of recovery.

year on year, the decline in exports was almost 10 per cent.

Davy Stockbrokers said the figures were mixed.

“The broad picture is that the recent weakness of goods exports has been offset by strong growth on the services side, which should limit the impact on first-quarter GDP,” Davy’s David McNamara said.

The Government last month cut its forecast for economic growth marginally, to 1.3 per cent, and expects exports to rise by 2.3 per cent over the year.

“At the end of the day the export sector has been the main driver of Irish economic activity in recent times and will remain the key growth engine for some period to come, but there are clear downside risks in the short-term, especially in relation to external demand,” Mr McQuaid said.