Increase in trade surplus good news for Ireland's economic recovery
By Tom Treacy, 22nd January 2013
The CSO’s preliminary tabulations document the November seasonally adjusted trade surplus ticking upward by 32%. At last check, the numbers show €4.384 billion. There were seven percent more exports during the month, meaning a little more than 8 billion euros.
Compared with October’s €3.7 billion, November’s seasonally adjusted imports decreased by €481 million, this amounts to a drop of 11%. Export value between November 2011 and 2012 dropped by 4% – €305 million – to €8.29 billion. In November 2012, over half of total exports (€4.68 billion) were overall generated by the EU. Most exports that weren’t going to Europe were going to the US, which accounted for 18 percent of the month’s total exports.
Comparing November 2011 and 2012, this past year saw €251 million less in import revenue: a loss of 6% to €3.91 billion. Only 1/3 of November 2012 import value did not come from the EU; the UK accounts for 35% by itself. China made up 7%, and the US for 8%. These countries comprise the primary non-EU importers.
NCB’s chief economist – Philip O’Sullivan – explained how the pharmaceutical patent cliff helped to increase exports in spite of how most models predicted a November decline. He described how chemical exports only dropped by 1.5% from last year because pharmaceutical companies increased profits by close to 20% from month to month – up to €5.2 billion – thereby addressing some analysts concerns over this area.
According Merrion Stockbroker’s chief economist – Alan McQuaid – the figures demonstrate a better-than-expected performance. He highlighted how strongly exports in organic chemicals and services had performed and that they had offset the decline in the pharmaceutical sector’s production. The number of new companies registering in Ireland was also a contributor with many of these sponsored by the IDA.
*2012 export growth for Ireland has decreased from 2011 levels. There is now being predicted a rise of 2.9 percent in volume of products and services, possibly rising again to 4 percent in 2013 and 5.5 percent if all goes well. McQuaid also said that the patent problems threaten to weaken overall growth.