Pharmaceuticals drive export growth
Two high-growth sectors of the pharmaceutical and chemical industry have been entirely responsible for the overall growth in exports this year, according to the latest figures from the Central Statistics Office.
The latest trade figures show weak trends in other export sectors, including the key electronics industry, in the first nine months of the year. Meanwhile, provisional figures for October indicate a 10 per cent fall in exports compared to the same month last year, suggesting that the weakening international economy was taking its toll.
Total exports of medical and pharmaceutical products - the strongest single sector - increased by an extraordinary 67 per cent to €11.3 billion in the first nine months, when compared to the same period last year. Meanwhile, in the second high growth sector - organic chemicals - exports rose by 7 per cent to €13.9 billion. Together exports in these two categories rose by €5.5 billion in the first nine months of 2002.
As overall exports from all sectors in the first nine months were up just €1.58 billion compared to the same period in 2001 to €71.21 billion, total exports would have fallen had it not been for the strong performance of the two high growth sectors.
The nine month figures clearly show the impact of the downturn in the electronical and telecommunications sectors.
Overall exports in the machinery and transport equipment sector - which includes many of the major electronic multinationals - were down 10 per cent on the January to September period of last year to €25.4 billion.
On a country-by-country basis, the figures showed a sharp increase in exports to Belgium, up 228 per cent to €9.97 billion, presumably due to sales from one or both of the high growth sectors.
Exports to Germany - where economic growth has collapsed - fell 46 per cent to €5.02 billion and there were also significant falls in sales to France, the Netherlands, Philippines and Japan. Exports to Britain rose 9 per cent to €1.36 billion.Overall exports were reasonably strong in the early months of the year, touching a monthly record of almost €9 billion in May.
However since then the trend has weakened and after a slight pick-up in September, the October figure showed a 9 per cent decline on the previous month. There is no sectoral breakdown given for the October figures, so it is not clear what contributed to the fall-off.
The export trend mirrors the health of the international economy, where signs of recovery evident in the early months of the year disappeared over the past quarter. The outlook for exports next year now depends on the trend in the international economy.
Most forecasters expect a weak start to next year, partly due to the threat of war in Iraq. However beyond that there is uncertainty about when recovery might kick in, with much depending on what happens in Iraq and the consequence for oil prices.
Exports in October were €6.97 billion, on a seasonally adjusted basis, 10 per cent down on the same month last year.
There are also signs of imports weakening. Total imports, adjusted for seasonal factors, were €3820 million in October, down 6 per cent on the previous month. The trade surplus for the month was €3,150 million, compared to €3,555 million the previous month.
The weak export figures provide further evidence of a difficult environment for industry, following on from recent industrial employment data. These showed a fall of 18,100 to 253,000 in the numbers employed in industry in the year to September.
Reflecting the trade figures, the employment data showed weakness in the electrical and electronic sectors, while employment in the chemicals and pharmaceuticals sectors rose in the year to last September.
The difficult environment for business is also reflected in an increase in redundancies notified to the Department of Enteprise Trade and Employment to 23,556 in the first 11 months of this year, a 28 per cent increase on the same period last year.