Saturday, March 3, 2012

3/3/2012: Irish Merchandise Trade 2011 (preliminary estimates)

With some delay, updating Ireland's external trade figures for merchandise trade for December 2011 data. Instead of doing a monthly update, let's take a look at the annual figures. Please keep in mind that December numbers incorporated here are preliminary estimates by the CSO. And do also remember that this is trade in goods / merchandise trade ONLY - the CSO doesn't wish to distinguish it as such in its releases, but this data does not include trade in invisibles / services.

Chart below shows exports, imports and trade balance in goods trade:

  •  Imports value posted significant increase in 2011 of 5.65% yoy after a shallow rise of 0.62% in 2010. 3 year average rate of change in imports remains deeply negative, however at -5.13%, a year ago it was -9.85%.
  • Exports rose 3.88% yoy, reaching the level of €92.71bn, the second highest level in history after €93.68bn in 2002. Last year, exports rose 5.26% yoy. 3 years average rise now stand at 2.31% against previous year 3 year average increase of 0.05%.
  • Trade surplus rose to another historic high of €44.32bn - up 2.0% yoy - a significant accomplishment, but a slowdown in the rate of growth of 10.64% achieved in the 2010. In 2010, 3 year average rate of increases in trade surplus was 19.62% and in 2011 it was 16.64%.
  • Record trade surpluses have now been recorded in 2009, 2010 and 2011, implying that the 'exports-led recovery' is now full 3-years strong without a corresponding translation into full economic recovery.
Chart below shows imports intensity of our exports - the ratio of exports to imports expressed in percentage terms.

Per chart above, our exports remain largely divorced from imports, which strongly suggests that the last 3 years (during which imports intensity was well above the historic average of 150%) the core driver for exports and trade balance performance was transfer pricing, not the real economic activity. Chart below illustrates the differential between volume of trade consistent with 9-year MA intensity and the actual volume of trade, with the MA-consistent trend stripping out some recent transfer pricing activity out of the exports figures (note, this, of course, is a highly imperfect measure, so treat the chart as being simply illustrative).

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