EXPORTS plunged 12pc in January as sales of chemicals and pharmaceuticals dived, new figures show.
Trade exports fell to €6.8bn in January from €7.7bn in the same month last year as demand for some chemicals plunged by a third and exports of medical and pharmaceutical products fell by a fifth.
Irish exports have see-sawed in recent months as important drugs such anti-cholesterol treatment Lipitor saw their patents expire – pushing down the value of Ireland's exports and highlighting the sector's dependency on a relatively small number of products.
"The expiry of patents in certain pharmaceutical products is impacting negatively on output," said Merrion Stockbroker's Alan McQuaid.
While the so-called patent cliff is pulling down export numbers, it will have little effect on the real economy because the sector employs relatively few people, said Davy Stockbrokers wealth manager David McNamara.
Pharmaceuticals accounts for 10pc of GDP but employs just 22,000 people.
Imports also declined in January, falling 1pc to €4.4bn year-on-year.
The CSO also said yesterday that it was revising down the overall trade surplus for 2012 to €42.8bn. The new figures suggest the surplus fell last year from the previous year. Preliminary figures had suggested 2012 was a bumper year for the economy.
In more bad news, Ernst and Young's latest report on the European economy cut its GDP forecast for Ireland ten-fold.
The accountancy firm says it expects the economy here to grow a puny 0.1pc rather than the 1pc it forecast three months ago.
Ireland has made a lot of progress since the start of the financial crisis but that short-term growth prospects are still weak, Ernst & Young said. It says we should start to see sustainable growth of 1.9pc in 2014, accelerating to 2.5pc in 2015.
Ernst & Young economist Marie Diron said Wednesday's sale of 10-year sovereign bonds contributed to its prediction for growth in 2014.
"The success of the 10-year bond issuance by the Irish Government is very good news for the economy. It is further evidence of investors' confidence in the sustainability of public finances and cements Ireland's restored access to financial markets. Similarly successful bond sales would encourage rating agencies to upgrade Ireland's credit rating. Achievements such as this is one of the main factors behind our forecast of a return to solid growth from 2014 onwards."
The forecast says that unemployment levels in Ireland are predicted to remain at high levels in 2013 (14.9pc), before we start to see a modest improvement to 13.8pc in 2015.
However, it says that productivity has improved since 2008 because Irish output has not fallen as quickly as employment, similar to the productivity boost evident in Spain and Portugal.