Exports fall 2% in February on January figures

Exports weakened further in February, with new figures pointing to a 2 per cent drop on the previous month.

The Central Statistics Office said yesterday that goods worth €6.9 billion had been exported in February, down from slightly more than €7 billion in January.

When compared to the same month of 2004, the February performance also represented a 2 per cent decline.

Imports also fell between January and February, dropping by 3 per cent to €4.3 billion. They were, however, well ahead on an annual basis, rising by 7.6 per cent on February of last year.

Economists hesitated over drawing conclusions from the traditionally-volatile monthly numbers, preferring instead to focus on a three-month moving average.

Philip O'Sullivan at Goodbody Stockbrokers pointed out that exports were ahead by 1.2 per cent on the same month of 2004 by this measure, while imports were up by 7.3 per cent.

"This marked the tenth consecutive month where the rate of increase in imports outpaced that of exports, albeit off a lower base," said Mr O'Sullivan.

The Minister of State for Trade and Commerce, Michael Ahern, said it was too early to see a significant trend in the 2005 numbers.

"I firmly believe that Irish companies can continue to win contracts across the globe and the Government remains committed to assisting them to do that," he said.

There was some good news for exporters yesterday as sterling pushed up to a seven-month high against the euro.

John Moclair, head of domestic sales at Bank of Ireland Global Markets, said the push up to 68p came after a weaker-than-expected German business confidence report, which partly undermines the "recovery story" in Europe.

This was then followed by news of higher inflation in the UK, which could lead to a rate increase from the Bank of England.

"Such a rate hike is seen as being a positive for sterling," Mr Moclair said. He believes many traders are betting on a further sterling increase to 67p against the euro.

New figures from Eurostat meanwhile show that the Republic recorded the EU's biggest fall in industrial production between January and February with a drop of 9 per cent, which was more than 20 times the average EU fall.

Compared with February 2004, Irish industrial output fell by 4.8 per cent, the second largest decline in the EU.