Dairy sales help lift Ireland to record trade surplus
THE country's trade surplus surged to a record high in June as exports rose faster than imports. Demand from the UK, US and Europe helped spark a dramatic increase in dairy sales.
The seasonally adjusted trade surplus increased by 8pc to a record of €4.1bn in the first five months of the year. Exports jumped 5pc to €7.9bn and imports rose 2.4pc to €3.82bn.
The trade surplus was €3.8bn in May and just €2.6bn in April. The cumulative trade surplus in the first half of the year was €21bn.
The balance of trade is a closely watched indicator in most countries because a healthy surplus is usually regarded as a sign of economic recovery.
Ireland has the third-largest trade surplus among the 27-nation European Union as exports to the booming European economies picked up.
However, some economists warned yesterday that this trend was likely to slow as the economies in our biggest trading partners stagnate.
"The export sector will be the key driver of Ireland's economic recovery in the short term at least and the performance in the year to date has been very good," said Alan McQuaid of Bloxham Stockbrokers.
"However, with clear signs that the global economy is slowing down, Ireland's export figures are likely to weaken in the coming months. This, in turn, will have negative implications for the country's overall growth prospects this year."
The detailed CSO figures also show that medical and pharmaceutical exports rose by 14pc, or €1,362m, on an annual basis, while organic chemicals increased by 7pc, or €582m, and dairy products jumped 47pc, or €217m.
Irish-made exports to Spain fell by 16pc but rose to most other countries. More than half of Ireland's exports went to the United States, Belgium and Britain in the first six months of the year.
Belgium appears as a major customer for this country's exports because so many companies ship their products through Antwerp before transporting them on to the rest of Europe.
Trade Minister Richard Bruton, who is leading a mission to the US next month to encourage business, welcomed the latest trade figures.
"It is heartening to know that despite the turbulent international markets into which we are exporting, our exports are continuing to perform to an extremely high level," he said.
"These trade figures show what our entrepreneurs can achieve when the conditions are right and only encourage me further to pursue this agenda so that we can continue to support export-led growth and recovery."
A breakdown of the figures for the first five months shows that exports to the US increased by 11.8pc to €9.1bn. Exports to the EU rose by 4.2pc to €22.4bn.
"These are very welcome trends and show the importance of trade to the economy and its potential to be a significant contributor to recovery," Mr Bruton added.