Surging import growth eats into trade surplus

Imports grew at twice the rate of exports last year, pushing Ireland's trade surplus to its lowest level in over five years. Buoyant consumer demand drove imports, with export performance increasingly dominated by developments in the chemicals sector, according to figures from the Central Statistics Office.

Revised trade figures for last year show that the value of exports rose 10.7 per cent annually, compared with a 5 per cent growth in imports.

Import growth accelerated to 12.7 per cent in January.

Some €88.4 billion worth of goods was exported from the Republic last year, while €56.5 billion worth of goods was imported. However, the trade surplus in the chemicals sector of around €33 billion exceeded the total trade surplus of €31.9 billion.

Export growth hit 10.7 per cent in January, but remained weaker than import growth of 12.7 per cent and was driven largely by export of pharmaceutical products to mainland Europe.

At €7.1 billion, the value of exports in January exceeded the value of imports by €2.2 billion.

Alan McQuaid of Bloxham Stockbrokers attributed weakness in export growth to developments in the UK and US economies.

"For 2005 as a whole, the value of goods exports to Britain fell by 0.3 per cent on 2004. Meanwhile, exports to the US were virtually flat in value terms over the same period, but on the positive side exports to China rocketed by almost 42 per cent in the year."

Strong import growth last year and into January reflected high demand for computers and cars, as well as the effect of high oil prices on the value of energy imports.