Record trade surplus of €4.15bn posted in October
Sharp slide in imports allied to strong exports from Irish companies
THERE was a record trade surplus in October as a sharp fall in imports outpaced a small decline in exports compared with September.
When monthly seasonal factors are taken into account, October's surplus of €4.15bn exceeded the €4.11bn recorded in July. It is only the third time the monthly surplus has exceeded €4bn.
October's imports of €3.47bn were the third lowest ever recorded and one-third less than the peak €5.5bn imports recorded in February 2007.
Although much of the trade surplus flows out again in the form of multinational profits, the fall in imports, and strong exports from Irish companies, are re-balancing Ireland's dealings with the rest of the world.
This balance of payments moved into surplus in the third quarter of the year, according to recent figures from the Central Statistics Office.
This was assisted by foreign companies that have established headquarters here remitting profits from abroad to those Irish bases.
Such tax-driven flows make Irish statistics difficult to interpret. Most analysts think the underlying balance of payments will move into surplus late next year, or in 2012.
"Almost half the multinationas in the State expect to increase the amount they export in 2011, according to a survey by the Irish Management Institute and National Irish Bank," said Alan McQuaid, chief economist at Bloxham Stockbrokers.
"One worrying aspect for indigenous Irish exports in particular is the exchange-rate volatility of euro/dollar and euro/sterling, but we think they will strengthen against the euro on a six-month view."
The CSO said that, seasonally adjusted, the value of exports in October was €7.6bn, down 2pc from September, but imports dropped by 11pc.
Ignoring price changes, the volume of exports in September was 16pc higher than the same month last year. Stronger trade flows in the early part of last year meant that, comparing the first nine months of each year, exports were up 3pc and imports down by 1pc.
The fall in imports was influenced by a 30pc drop in "other transport equipment", which includes expensive purchases of aircraft. But imports of road vehicles, mainly cars, jumped 73pc, while the cost of importing oil products rose by 36pc.
Over the nine months, exports of computer equipment decreased by 32pc in value terms compared with 2009. Sales of medical and pharmaceutical products increased by 13pc to just over €2bn.