Trade surplus gains in August

Exports continued to rise in August, new data showed today, widening the trade surplus.

Seasonally adjusted exports rose by 10 per cent to almost €7.8 billion in August, while imports were 6 per cent higher at €4.1 billion.

That pushed the trade surplus 15 per cent higher to almost €3.7 billion.

In the first seven months of the year, exports were 4 per cent higher than in the same period of 2010, reaching €54.3 billion. This was driven by a rise in the exports of medical and pharmaceutical products, which rose by 11 per cent or €1.6 billion, and organic chemicals, which gained 8 per cent, or €925 million. Exports of petroleum were 69 per cent higher, a rise of €333 million.

The gains were partially offset by a fall in the exports of computer equipment, which was 10 per cent (€261 million) lower than a year earlier, and telecoms and sound equipment, which fell by 25 per cent, or €124 million.

The US imported 9 per cent more goods than the previous year, while the export market to France and Germany also increased.

More than half of Ireland's exports went to the US, Belgium and Great Britain.

Over the same period, imports were 7 per cent higher as demand for petroleum and medical products increased.

With weak domestic demand, Ireland's economic recovery is heavily dependent on exports. However, the global slowdown has raised concerns about growth in the economy.

Bloxham chief economist Alan McQuaid described today's trade figures as "encouraging".

"Given the slowdown in the world economy and the fall-off in global demand, the data are another endorsement of Ireland's strong export model," he said.

"But the worry is that growth will decrease markedly in the second half of 2011 due to the slowdown in the world economy and the fall-off in global demand, though the August figures suggest that things may not be as bad as previously feared."

Davy chief economist Conall Mac Coille said July's export figures had been taken by some commentators to mean that growth had slowed.

"Clearly, the July export data were simply erratic, as we now know following the sharp rebound in August," he said. "So it is far too early to discern any material impact on Irish export growth from the slowdown in Europe."