Exports, trade surplus drop in May but strong year-on-year - CSO
The trade surplus last month narrowed to the second highest so far this year, with economists hailing the continued broad-based recovery in Ireland's goods exports.
The Central Statistics Office (CSO) said goods exports fell and imports rose in May compared with April, shrinking the trade surplus.
At €3.97bn, the trade surplus shrank by 14pc or €627m from April’s figure.
But monthly data can be volatile and while exports fell on the month, the value of exports was 8pc higher compared with the same month last year.
Economists said the data shows that Ireland’s goods exports are continuing their broad-based recovery, with a number of indicators now suggesting the economic recovery has accelerated in the first half of this year.
Conall MacCoille of Davy Stockbrokers said Irish exports have expanded at a rapid pace this year.
“In the year to May, goods exports equalled €44bn, up 18pc from the €37.2bn recorded in 2014,” he said.
“ True, the rebound has reflected the exceptional 31pc rise in pharmaceutical exports but even excluding pharmaceuticals goods, exports have increased by 12.6pc.
“This broad based expansion in Irish goods exports no doubt reflects the weakness of the euro accompanied by strong UK demand.”
May’s data showed that the value of exports for May was €8.8bn, representing an increase of €673 million, or 8pc, when compared with May 2014.
The main driver behind the May increase was the rise in the exports of medical and pharmaceutical products of €542 million, or 30pc, to €2.36bn.
The unadjusted value of imports for May was €4.7bn, representing a decrease of €110 million, or 2pc, when compared with May of last year.
Alan McQuaid of Merrion Stockbrokers said the trade surplus remained “healthy”, although not as high as anticipated.
“The surplus in May was €3.97bn, down from the revised surplus of €4.6bn posted in the fourth month of the year,” Mr McQuaid said.
“The April surplus was the highest so far in 2015, and the largest in almost three years. Although lower than in April, the May trade surplus was the second-highest of 2015 to date and the third-highest positive balance in the past two-and-a-half years.”
The breakdown of where Irish exports go continued to show strong reliance on the European Union.
The European Union accounted for 54pc of total exports in May of which 14pc went to Belgium. The USA was the main non-EU destination accounting for 26pc of total exports.
The top five countries in the EU for Irish exports were Belgium, Britain, Germany, the Netherlands and France.
The EU accounted for 61pc of the value of imports in May, with 29pc of total imports coming from Britain. The USA at 14pc and China at 7pc were the main non-EU sources of imports.
The top five countries for Irish imports in the EU were Britain, Germany, France, the Netherlands and Spain.
Mr McQuaid said Ireland’s trade performance in the past eighteen months or so has benefitted from competitiveness gains and by the weakening of the euro.
“Against a difficult global backdrop, the strength of the US and UK economies has been clearly a factor here,” he said.
“And the indications are that these two key economies will perform well again in 2015."
He said he expected Ireland’s trade balance to increase this year for the first time since 2010.
GDP data from the first three months of the year is expected to be released by the CSO next week.