Exports dropped off markedly in September, interrupting a positive trend that had been in place since the end of May.

Seasonally adjusted figures released by the Central Statistics Office yesterday show that the value of exports fell by almost €1 billion to €6.6 billion between August and September.

The fall brought exports back to levels recorded around the middle of last year when the economy was starting to regain a notable buoyancy.

Imports fell by 3 per cent to €4.3 billion over the month.

Monthly trade figures have, however, been volatile in 2004, with economists yesterday urging caution on placing too much emphasis on the September release.

Mr Dermot O'Leary of Goodbody Stockbrokers pointed out that, despite the September drop, exports remain ahead by 2.4 per cent in the year to date, while imports are up by 3.2 per cent.

"Export growth is likely to pick up before year-end given the unusually large fall in the value of exports in September," Mr O'Leary noted in an analysis of the latest numbers.

A breakdown of unadjusted figures for August shows that exports over the first eight months of the year were running ahead by 5 per cent at €55.2 billion.

The largest contributor to this increase was the medical and pharmaceutical sector, where exports were up by 14 per cent at almost €10 billion.

Less buoyant was the machinery and transport equipment sector, which represents the Republic's second-largest export category.

The August figures show that exports in this area were down by almost 3 per cent year on year over the first eight months.

Mr O'Leary took some comfort from this result however, noting that annual declines in the sector have now been easing for seven months in a row.

Exports to Britain and the US - the Republic's two largest trading partners - were both down a touch in the eight months to the end August.

The value of exports to the US, which can be driven largely by the euro/dollar exchange rate, was down 1 per cent at €11.16 billion, while exports to Britain fell by 2 per cent to €8.7 billion.

Mr O'Leary suggested that the US fall may not reflect absolutely the real trading picture, with US trade numbers pointing to an 18 per cent gain in Irish imports in the year to date.