Goods imports and exports data just released by Ireland’s Central Statistics Office show that the trade surplus widened to €4.3bn in November from October’s €3.3bn outturn. This improvement was more or less evenly split between an increase in exports (+7% m/m to €8bn, a three month high) and a decrease in imports (-11% m/m to €3.7bn, an eight month low). In volume terms exports rose 8% m/m while imports fell 9% m/m.
Ahead of today’s release the main interest centred on the ‘chemicals and related products’ sector, given concerns about the potential impact of the ‘patent cliff’. Previously released industrial production data had pointed to a modest decline in that area during November. In the event, exports in this segment surged almost 20% m/m to €5.2bn, a welcome surprise which leaves the year-to-date decline in chemicals exports at just 1.5% – an outturn that may soothe some of the concerns relating to this area.
On the import side, m/m declines were recorded across all 9 categories in November. The most notable category within this was the ‘Mineral fuels’ segment (imports -€222m or 32% m/m), where higher prices may be acting as a dampener on demand.
Elsewhere in the release we see a mixed picture in terms of Irish goods exports by destination. In the first 11 months of 2012 exports to the EU were +3.6% y/y, with exports to the Eurozone seeing a 2.5% y/y increase, a solid performance given the pressures facing many of Ireland’s European partners. Total exports to the UK were +7.0% y/y over the same period. However, weaker performances were registered in terms of exports to the US (-16.5% y/y, driven by a fall in chemicals exports) and the fast-growing BRICS (-0.7% y/y) countries.
Overall, in the first 11 months of 2012 exports were +1.1% y/y while imports were +1.5% y/y. This produces a trade surplus of €40bn, which is +0.6% y/y – an impressive outturn given the pressures noted above.
Philip O’Sullivan, Chief Economist, NCB Stockbrokers Limited,
