Friday, September 13, 2013

Two minor points on the external trade figures

The CSO have releases the goods trade data for July.  Two minor points spring to mind.

  1. The balance of trade in food is lower than last year.
  2. Wide-bodied passenger aircraft have a big impact on the figures.

More details on these below.

ONE: Some emphasis is put on the positive performance of food exports with a total of €4,911 million of export in the year to July compared to €4,513 million in the equivalent period last year.  This is an 8.8% increase but it is a nominal rather than real figure – price effects are included. 

It is also worth noting that food imports have similarly increased: from €3,058 million in 2012 to €3,477 million this year.

Thus, the balance of trade in food and live animals has actually decreased slightly, falling from €1,455 million in the first seven months of 2012 to €1,434 million this year.

TWO: Although food imports (and also chemical imports) are up overall imports are down.  There was €29.0 billion of goods imports in the period to July 2012 compared to €28.5 billion this year.  The source of the drop is primarily category 79 in the SITC (Standard International Trade Classification).  SITC 79 is ‘Other Transport Equipment’. 

By this time last year imports for this category were €2,025 million.  This year they have fallen to €778 million.  What other transport equipment have we imported €1.2 billion less of this year? Ans: Wide-bodied passenger aircraft.

Here is an extract from the more-detailed Trade Statistics (to June) for category 792.40

792.40 Trade Statistics

In the first six months of 2012 there were 40 aircraft larger than 15,000kg imported worth €1,823 million compared to just 18 such aircraft this year worth €638 million, with such imports from Brazil and the US substantially down.

This reduction will provide a boost to the balance of trade this year but in reality it is little more than the timing of purchase decisions of some of the aircraft leasing companies who are based here.  The improvement in the balance of trade will be offset by a reduction in Investment as measured in the national accounts (GNP/GDP).  There will be no discernible impact to the economy on the ground.

2 comments:

  1. Seamus, I recall being told by someone in the CSO that aircraft purchases are only added to imports if they are registered with the Irish Aviation Authoirty. For the vast amount of aircraft leasing transactions that take place here the planes are not registered with the IAA.

    The bulk of US purchases would relate to Ryanair in that case (Boeing which makes up its fleet being made in America).
    Aldus Aviation, an aircraft leasing company in Shannon bought a lot of Embraers from Brazil in 2012 and are still buying. They seem to keep the fleet based in Shannon so that would mean those purchases would be registered here hence the increase in imports from Brazil.
    http://www.reuters.com/article/2013/01/17/us-embraer-aldus-idUSBRE90G18920130117
    http://www.aldusaviation.com/index.php

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    Replies
    1. Hi,

      Thanks for that. That looks like a good explanation. Here is a delivery schedule from Ryanair up to March 2012.

      http://www.ryanair.com/doc/investor/FleetDeliverySchedule.pdf

      It would be interesting to see what the figure up to March 2013 was.

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