Trade surplus to top last year's record as exports bounce back
IRELAND'S trade surplus for 2011 is likely to top last year's record after a surge in the sale of medical and pharmaceutical products helped exports rebound in August.
New figures from the Central Statistics Office show exports rose 10pc to €7.76bn in August from €7.04bn a month earlier.
A 6pc increase in imports to just over €4bn meant the trade surplus jumped 15pc to €3.7bn after slipping back in July.
Those numbers prompted Bloxham Stockbrokers to increase their forecast of a trade surplus of as much as €44bn compared to last year's record €43.4bn. In the first seven months of the year exports were 4pc higher than in 2010 at just under €54.3bn.
Exports from the medical and pharmaceutical sector were the main driver of the growth, climbing 11pc or €1.6bn, while organic chemicals gained 8pc or €925m. Petroleum exports surged 69pc or €333m.
Bloxham's Alan McQuaid described the figures as "encouraging", especially when the global economic turmoil was taken into account.
"Given the slowdown in the world economy and the fall-off in demand, the data is another endorsement of Ireland's strong export model.
"However, the worry is that growth will decrease markedly in the second half of 2011 due to the slowdown in the world economy and the fall-off in global demand, though the August figures suggest that things may not be as bad as previously feared," he said.
Despite the strong growth over the first seven months of the year, the sale of computer equipment fell 10pc while telecoms and sound equipment plummeted by a quarter.
"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, all things considered," said Mr McQuaid.
There was some reason for pessimism though, with signs that the world economy is slowing down, suggesting exports are likely to weaken in the coming months, which in turn should have negative implications for the country's overall growth prospects this year.
"(Despite that), Ireland has a very healthy and dynamic export model, putting it in a much better position than other eurozone 'peripheral' debt countries to move forward once the world economy regains momentum," he added.
Enterprise Minister Richard Bruton welcomed the figures, calling the strong performance "crucial" to an economic recovery.
"These figures show that an export-led recovery is a real possibility. They are particularly welcome after a period of mixed news about the global economy into which we export."
Mr Bruton sounded a note of caution, however. "Any signs of recovery are fragile, and we have a long way to go," he said.
Exports to the US climbed 9pc compared with a year earlier, while the level of goods sold to France and Germany rose by 11pc by 8pc respectively. Imports in the first seven months were up 7pc year on year at €28.5bn, with imports of petrol products jumping 28pc.