Friday, October 22, 2010

External Trade

The CSO released the latest External Trade figures today giving details of our merchandise trade to August.  There was a monthly drop in total exports in August (-3.6%) and added to the monthly increase in imports of 2.8%, our overall monthly trade surplus fell by 9.3%.

Here is a graph of our monthly exports and imports.  The fall in both exports and imports that was seen towards the end of 2009 has been reversed.

Exports and Imports

Here is the trade balance (exports – imports) over the same period.  This has been one of the few positive indicators as Ireland has been dragged through the economic mire over the last two years or so.

Trade Surplus

The €28.4 billion trade surplus recorded in the first seven months of 2010 is over 50% larger than than the €18.7 billion surplus recorded in the equivalent period in 2007.  However, as we have examined before the basis of this increased trade surplus is subject to some doubt.

The CSO provides data on the categories of our exports.  Here is a comparison of the January to July period for 2008, 2009 and 2010.

Exports by Category to Jul

The stand-out figure is that more than 60% of our exports come from a single category – chemicals and related products.  In fact with chemical imports of €5.0 billion to July it is clear that this category accounts for most of our trade surplus.  The trade balance excluding this single category is not as impressive.

Trade Balance excluding Chemicals

Excluding chemicals we struggle to record a trade surplus and this is even with the more than 25% drop that has been recorded for imports since 2008.  The imports version of the above trade by categories table can be seen here.  Imports excluding the chemicals and related products category are down more than 30%.  The non-appearance of a trade surplus excluding chemicals in light of such a drop in imports suggests that the performance of exports excluding chemicals has not been stellar.

Exports excluding Chemicals

Our export performance is being masked by increases in chemical exports.  And in this category the performance of pharmaceutical products has bucked all international trends.

Pharmaceutical Exports

The pharmaceutical sector is becoming ever more dominant as a proportion of Irish exports.  Since 2007 exports in this category have increase from being 15% of total exports to nearly 30% of total exports. See graph here.  In fact, July 2010 saw record exports of pharmaceutical products with exports of €2,339.2 million.

The final issue we will consider is that of our trading partners.  We looked at this using data to the end of 2009 here.  There has been little to change the conclusions we drew then.

Exports by Country to July

Although there has been a 6.5% drop in 2010, Belgium remains our largest EU trading partner.  We’ve sold about €1.3 billion more goods to Belgium than Great Britain.  Belgium’s population of less than 11 million have bought more of our exports than the combined 193 million population of Germany, France and Spain.

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