Trade surplus widens as imports decline by 7pc
The trade surplus widened to €3.3bn in October from €2.9bn in September, stoking hopes in some quarters that a recent fall in pharmaceutical exports was a statistical blip rather than the beginning of a downward trend.
Goods exports volumes rose by 1pc following a 17.9pc decline in September on falls in the pharmaceuticals sector. Pharmaceutical exports rose 3.7pc in October.
"The recovery in exports is a welcome development after sharp falls in September," said Davy stockbrokers analyst David McNamara. However, he repeated recent warnings that sharp falls in exports are likely next year as patents on some important medicines expire.
Imports of goods fell 7.4pc on the month, which also helped to boost the trade surplus. Exports to the UK are up 10pc this year, while exports to the eurozone rose 2.5pc. Exports to the US fell 14pc over the same period.
Comparing October this year with last October, imports increased 13pc thanks to food and live animals along with machinery. The EU remains the main source of imports, accounting for 60pc of imports. The US at 12pc and China at 7pc were the main non-EU sources of imports.
Despite the pick-up, the October surplus was still the third lowest this year.
Chambers Ireland said the figures highlight "ongoing problems" in the domestic economy. "These figures highlight that the export sector is continuing to compensate for the distressed domestic sector, further enforcing the difficulties in the domestic economy," it said.
Seasonally adjusted exports were up 1.6pc in the month, while imports posted a decrease of 6.6pc. On an unadjusted basis there was a surplus of €3,147m in October, €379m lower than the surplus of €3,526m posted in October 2012. In the first 10 months of 2012 the cumulative trade surplus amounted to €36.2bn. Comparing October this year with October 2011, the value of exports increased by €110m (1.5pc), though exports of chemicals and related products fell by €253m.
Alan McQuaid, an economist at Merrion Stockbrokers, warned: "There are clear downside risks in the short-term, especially in relation to external demand."