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Analysts see encouraging export trend

Friday, September 14 12:39:53

Reacting to today's trade figures from the CSO, analysts said that the figures are encouraging, though concerns remain that goods exports volumes are still weak and the trade surplus is being propped up by services.

Irish exports put in a strong performance in July with the trade surplus (seasonally-adjusted) increasing to E3.9bn (from E3.5bn in June).

On an annual basis, the value of exports grew by 3pc in the three months to July while imports were up by 6pc over the same period. Taking the first eight months of 2012 combined, the trade surplus amounts to E24.9bn, a 3pc increase on 2011 levels.

These trends lie behind the improvement in the current account position, according to Dermot O'Leary, an economist with Goodbody Stockbrokers.

"Volumes rather than values matter for economic growth. In this regard, the CSO data this morning show volume trends for the first time this year. In July export volumes grew by 2pc yoy, relative to a 13pc yoy decline in June. However, these data can be very volatile. Over the three month period to July, exports volumes actually fell by 6pc, while imports were down by 1pc. Comparing these figures to the value data above show that there has been a very significant increase in import and export prices over the past twelve months. The depreciation of the euro can explain both trends: A significant proportion of exports from US multi-nationals are priced in dollars. As a result, when converting to euros for data reporting purposes, the euro value will increase. A lower euro will increase the price of imported goods," he said.