Trade surplus at lowest level since December 2007

Exports fell sharply in July, while imports into the country jumped, according to new data.

Preliminary figures from the Central Statistics Office (CSO) shows that exports declined by 16 per cent or €1.2 billion to €6.4 billion compared to June and were down 11 per cent or €832 million on the same month a year earlier.

Coupled with a 7 per cent monthly jump in imports to €4.68 billion, the seasonally adjusted trade surplus fell by 46 per cent or €1.5 billion to €1.8 billion from June. This is the lowest level since December 2007.

The figures show a big decline in exports of chemicals and pharmaceuticals over the year to the end of June. Organic chemical exports were down 39 per cent on an annual basis to €988 million, while the value of medical and pharmaceutical exports declined by 19.3 per cent to €1.65 billion.

Comparing July 2014 with the same month a year earlier, the value of imports increased by 10 per cent or €395 million to €4.41 billion.

On an overall basis the EU accounted for €3,868 million or 57 per cent of total exports in July. The US was the main non-EU destination, accounting for 17 per cent or €1,15 billion of exports.

In terms of imports, 64 per cent of imports in July were from the EU, with 30 per cent coming from Britain. The US and China were the main non-EU sources of imports.

Weak global demand has hit Irish exports in the past couple of years, particularly on the merchandise goods side. But there are signs now that the world economy is starting to recover, and this has been reflected in the strong performance of merchandise exports in the first half of 2014, up 13.1 per cent in volume terms. However, whether the strong performance holds up for the rest of the year remains to be seen. The July data would suggest an easing off, though that said, chemicals exports can be quite erratic at the best of times, said Alan McQuaid, chief economist with Merrion Stockbrokers.

“On the basis of stronger global demand in 2014, we are looking for a recovery in export performance, with a volume increase in goods and services somewhere in the 8-10 per cent region, even allowing for some slowdown in the second half of the year,” he added.