Exporters rue worst year on record

Last year was one of the worst on record for traditional manufacturers in Ireland selling on export markets, despite strong overall performance by Irish exports, an industry body said today.

The Irish Exporters Association (IEA) said market conditions throughout the year tested the resilience of manufacturing exports "to breaking point", and forecast that a 3 per cent growth in exports in 2010 would mostly occur in the services sector.

Total exports of goods and services fell 1 per cent to €154 billion, divided between merchandise exports (€85.5 billion) and service exports (€68.4 billion).

However, excluding life sciences, export sales fell by €6.1 billion.

“Despite the strong overall performance of Ireland exports, it is hard to over-state the difficulties faced by indigenous exporters in 2009,” said IEA chief executive John Whelan.

Indigenous export of goods dipped 9 per cent to €13 billion. Exports of food and drink suffered throughout 2009, slipping 14 per cent and 21 per cent respectively.

General manufactured goods exports fell 26 per cent.

Exchange rate fluctuations caused difficulties for exporters during 2009, with the UK - Ireland's main export market - declining 16 per cent. The IEA estimates that sales of up to €2.5 billion were lost as exporters abandoned the market.

"Indigenous exporters who trade extensively with the UK were heavily affected by the continued interference in the sterling currency market by the Bank of England who effectively spent €175 billion in quantitative easing to support UK exporters," Mr Whelan said.

The IEA said a return to growth in exports to the UK in 2010 is unlikely unless the currency is allowed to return to regular trading levels, an exchange rate of about 80p to the euro.

It wasn't all gloomy news, however, with chemical and pharmaceutical exports rising 12 per cent and medical devices increasing 4 per cent.

"The 2009 growth in pharmaceutical and medical devices exports confirms Ireland is one of the leading international locations for the life science industry," said Mr Whelan.

"The industry which spans pharmaceuticals, chemicals, diagnostics, medical devices and biotechnology generates over 60 per cent of our merchandise exports making Ireland the largest net exporter of medicines globally."

Exports to the US showed a significant increase of 12 per cent in 2009, fuelled by the pharmaceutical, medical devices and chemical sector. Irish exports to the euro zone rose 3 per cent last year, as fiscal stimulus measures led to some recovery. Growth of 1 per cent was seen in the export market to Brazil, Russia, India and China.