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| Source: CSO |
The value of Irish merchandise exports in August 2008 was down 5% on August 2007, while the value of imports was down 14%. The value of exports in July 2008 was down 4% on July 2007, while the value of imports was unchanged. The CSO says that seasonally adjusted imports decreased by 10% in August relative to July 2008 and exports held steady . Relative to June 2008, exports in July held steady, while imports increased by 3%.
The January-July figures for 2008 when compared with those of 2007 show that:
Exports decreased from €52,960m to €50,839m (-4%) – Computer equipment decreased by 25%, Organic chemicals by 11%, General industrial machinery by 13% and Metalliferous ores by 17%.
Chemical materials increased by 41%, Medical and pharmaceutical products by 8%, Professional, scientific and controlling apparatus by 18% and Petroleum products by 36%.
Goods to Switzerland decreased by 14%, the Netherlands by 16%, Germany by 8%, the United States by 3% and the Philippines by 53%.
Goods to China increased by 31%, Malaysia by 70%, Spain by 5% and Poland by 36%.
Imports decreased from €37,076m to €35,077m (-5%) – Computer equipment decreased by 21%, Road vehicles by 14%, Special purpose machinery by 14% and Electrical machinery by 14%.
Petroleum products increased by 24%, Natural gas by 35%, Fertilisers by 69% and Medical and pharmaceutical products by 9%.
Goods from Great Britain decreased by 3%, China by 14%, France by 16%, Taiwan by 34%, Japan by 19% and Germany by 6%. Goods from Denmark increased by 47%, the Netherlands by 8%, Poland by 50%, the United States by 1% and Finland by 40%.
Dr. Ronnie O'Toole, Chief Economist, National Irish Bank commented today:
Imports Fall Sharply ....
For the year as a whole, excluding the higher import bill for fuels due to elevated oil prices, imports for the first 8 months of the year are down almost 10% on last year. This fall reflects two factors:
First, the slowdown in consumer spending is reducing imports into Ireland. There was a sharp fall in consumer goods imports since May, corresponding closely to the sharpfall in retail sales witnessed since Easter.
Second, the export of electronics has slowed significantly over the last year, which tends to be an industry which imports a lot of its inputs. As such, a fall in the export of electronics also results in a fall in the import of components.
.... Merchandise Exports Outside Electronics Broadly Stable ....
Merchandise export have continued to slip, with the electronics sector - thought to be sensitve to the level of economic activity globally - suffering a significant fall. Other areas have been a lot more stable, most notably Ireland's important pharamaceutical/chemcial sector.
... Though Large Risks in International Climate For Next Year ...
In many respects, Ireland's trade performance so far this year is looking in the rear view mirror. What is more important is understanding the extent to which the on-going financial market turmoil will impact on the real economy in our main trading partners.
The global financial crisis has taken its toll on the global equity market which is down by almost 50% in dollar terms since the peak last autumn. The current bear market is not explained by normal economic factors like a US recession, a global housing-led debt crisis or overvaluation in the credit bond market. What we are witnessing is a wave of financial mistrust that has only been witnessed more forcefully in the 1929/87 market crashes.
In the US, equity markets are currently pricing more than a ‘usual' recession. The scenario currently priced into market is consistent with a full-scale and long-lasting credit crunch in which healthy corporate businesses and private individuals will experience significant funding problems the consequences corresponding to zero corporate earnings growth for the next five years.
... which will Impact on Irish exports in 2009.
How deep the upcoming slowdown is very unclear. What is undoubted is that it will have a significant impact on Irish exports, particularly in electronics/machinery – which tends to be a quite cyclical industry, and for more obvious reasons the financial services sector. While there some positive factors going into 2009 - the weakness of the Euro against the dollar, and the falling cost of energy, the main scenario is one where Irish exports will be constrained by a sharp slowdown in the world economy.
