Irish trade surplus reaches record €35bn

Ireland's trade surplus with the rest of world was a record €35 billion (£27.6 billion) last year, despite the faltering economy. A dramatic fall-off in the rate of growth in imports was the main reason for the widening of the trade gap.

Exports grew by 10 per cent in 2001 to €92.3 billion, according to preliminary figures from the Central Statistics Office. But imports grew by only 2 per cent to €457.1 billion, compared with 26 per cent growth last year. The net result was a trade surplus for the year of €35.2 billion compared with €28 billion last year.

The record surplus hides a downward trend in exports that was in evidence during the year, and the last three months in particular, as the economy slowed. Exports in December, after seasonal adjustments, totalled €7.43 billion compared with €7.49 the previous month. Imports rose to €4.74 billion from €4.4 billion on a seasonally adjusted basis in December. However, they have fallen steadily since August.

There are two obvious reasons why imports have fallen faster than exports, according to Dr Dan McLaughlin, economist with Bank of Ireland. Car imports were down significantly, reflecting the fall-off in new car sales, while imports of machinery and other capital goods also fell as investment by manufacturing industry stalled. Imports of raw materials used in the manufacture of exports were also down in line with export sales.

The fall-off in production by industry was confirmed by industrial turnover figures which were also released yesterday. They showed a decrease of 21 per cent in the turnover of capital goods in the final quarter of the year compared with the previous year.

The 10 per cent growth recorded in exports was "remarkable achievement" when set against a background of zero growth in global trade, said Dr McLaughlin.

Mr Tom Kitt, the Minister for Labour, Trade and Consumer Affairs, said the figures showed exports had performed very well "in spite of the difficult international trading environment".

Based on the 11 months for which firm data are available, the EU accounted for 61 per cent of exports and euro-zone countries for 36 per cent, he said. Britain accounted for 22 per cent, the US 17 per cent and Germany 13 per cent. Germany was the fastest-growing of the major export markets, with its purchases of Irish goods increasing by 33 per cent.

The rate of growth in exports to the US was 12 per cent in the year as a whole. The extent of the slowdown in the US economy was underlined by the out-turn for the full year compared with the 50 per cent growth rate seen in the first three months of last year.

The strongest areas of growth were pharmaceutical products up 78 per cent; electrical apparatus up 21 per cent; and computers up 16 per cent.

"These trade figures assure me that, while we continue to be conscious that rates of export growth moderated as last year progressed, Irish exporters will nevertheless continue to be very competitive and will continue to be one of the drivers of Ireland's economic growth in the future," said Mr Kitt.