'Emerging markets needed' as exports of goods fall
THE exposure of Ireland's economy to outside events was laid bare yesterday after the level of goods exported unexpectedly fell in the last quarter and overall forecasts for the year were revised downwards.
According to the Irish Exporters Association (IEA), merchandise exports fell 2.7pc to just over €22bn. Only a 7pc boost in services exports to €20.2bn kept the data positive overall.
It meant exports rose by only 1.7pc year on year to €42.2bn during the three months to the end of September, which was well below expectations.
As a result, the IEA said it was cutting back on its growth forecasts for the full year to only 5.4pc compared with 7pc previously.
The slippage is especially troubling given the hope that has been placed in exports by the Government and analysts to help drive an economic recovery. Sustained export growth is a key tenet of the Government's fiscal projections.
IEA chief executive John Whelan said the lacklustre figures were due in the main to problems elsewhere. The third quarter of the year saw continued trouble in the eurozone and the downgrade of the US credit rating by Standard & Poor's.
"Business confidence has fallen again and with it stock market prices.
"The net impact has been a slowdown in international trade and until the Greek crisis and the wider problems are resolved this is likely to continue into next year," he added.
Exports to the US and UK, Ireland's main trading partners, fell 12pc and 8pc respectively. The IEA blamed the slump in the UK on unfavourable exchange rates and the impact of austerity measures in the region.
The agency also warned that despite the massive stimulus on the other side of the Atlantic, it was becoming clear the economy there was still struggling. Much of the exports to the US are pharmaceuticals and medical devices and that sector was stagnant during the period. For the year, however, exports are up 4pc.
In the eurozone, exports fell by 2pc during the third quarter but in the year to date exports to the region are still up 2.7pc. Despite that, trade with Germany fell back 3pc.
Mr Whelan said that given the stagnant growth figures in Ireland's traditional trade partners, the country urgently needed to focus on promoting trade in the emerging markets.
"We are doing very little business with Brazil, Russia, India and China (the BRIC countries) and that is demonstrated by the fact that exports to China fell 16pc year-on-year during Q3. We need the Government, through the Department of Foreign Affairs, to help promote Ireland as a potential business partner in Asia and South America."