Source: CSO

Irish Trade: Seasonally adjusted imports fell by 3% in October relative to September 2008. Exports from the multinational sector in particular, held steady. Relative to July 2008, imports fell by 14% over the three months to October 2008. Exports rose 2% over the same period. On an unadjusted basis, the value of imports in October 2008 was down 18% on October 2007, while the value of exports was down 3%. The value of imports in September 2008 was down 8%, while the value of exports was up 1% on September 2007, the CSO reported today.

The January-September figures for 2008 when compared with those of 2007 show that:

Exports decreased from €67,186m to €64,667m (-4%) – Computer equipment decreased by 26% (likely reflecting Dell's shift of PC operations to Poland), Organic chemicals by 8%, General industrial machinery by 12% and Metalliferous ores by 20%. Chemical materials increased by 41%, Medical and pharmaceutical products by 9%, Professional, scientific and controlling apparatus by 20% and Petroleum products by 54%.

Goods to Switzerland decreased by 17%, the Netherlands by 16%, Germany by 9%, Great Britain by 3% and the Philippines by 50%.

Goods to China increased by 22%, Malaysia by 50%, Spain by 11% and Poland by 30%.

Imports decreased from €46,661m to €43,527m (-7%) – Computer equipment decreased by 25%, Road vehicles by 19%, Special purpose machinery by 17% and Electrical machinery by 13%.

Petroleum products increased by 17%, Natural gas by 39%, Fertilisers by 67% and Medical and pharmaceutical products by 10%.

Goods from Great Britain decreased by 5%, China by 17%, France by 17%, Taiwan by 31%, Japan by 23%, Norway by 20% and Germany by 9%.

Goods from Denmark increased by 60%, the Netherlands by 8%, Poland by 51%, the United States by 2%, Russia by 86% and Finland by 37%.

Figures from the CSO indicate that imports have continued to decline sharply in October, while the export of goods stabilised.

Dr Ronnie O'Toole, Chief Economist at National Irish Bank commented:

Imports Continue to Slide as Consumers Stop Spending ....
The import of goods into Ireland continued to slow in October, with the value of imports falling 17% on the same month last year. Detailed figures show that the import of road vehicles are running at little over half the level in the same month last year, as purchases of private cars and goods vehicles dropped rapidly. The welcome fall in energy prices globally is also evident in the figures, with Ireland's import bill for petroleum products coming in below €400m, slightly lower than the same month last year. As energy prices globally continue to fall, this decline in the energy import bill should continue well into the new year.

The most dramatic decline in goods imports can be seen in components for Ireland's computer manufacturing industry, which have fallen from almost €800m in September 2007 to €535m this September. These components are used in the manufacture of office machinery in Ireland. The fall in imported components indicates that output in this industry will continue to fall in 2009, and may reflect a slowing of activity in Dell.

... though exports are proving somewhat resilient ...
The figures to date show that exports of goods from Ireland continues to slip compared to last year, though are proving relatively resilient. Ireland's export of goods peaked in 2002, though subsequently declined as elements of the computer hardware industry moved to the East and Asia. Since then, pharmaceuticals have taken over as the most important product category, with the broad pharmaceuticals/chemicals industry now accounting for over half of goods exports. This industry showed a significant increase in September of 13% compared to 2007. These figures only represent half of the story for Irish exports, with services being the driver of growth in recent years.

While exports to the UK in October were in line with the same month last year, this in the main reflected the performance of pharmaceuticals/chemicals. Other sectors continue to decline on the back of the weaker sterling - which makes Irish exports less competitive - and the deepening recession. For example, exports of food and beverages to the UK were down 3% on October last year. Interestingly, exports to Northern Ireland seem to have been particularly affected, with exports in September falling 12% on last year.

.... which should result in an improvement in Ireland's Balance of Trade.
One of the features of the domestic property boom was an increase in the rate of growth of imports that outpaced the rate of growth in exports, resulting in a deterioration in Ireland's Balance of Trade. The correction in the domestic economy is now resulting in a sharper fall in imports than exports, with the result that Ireland's Balance of Trade surplus is improving. This should ultimately result in an improvement in the overall Balance of Payments, an improvement which was masked by a greater repatriation flows from Multinationals in the third quarter. The resilience of exports may be evidence that Ireland is a more competitive exporting country than is often portrayed, notwithstanding the current difficulty of firms exporting to the UK.