Monday, June 18, 2012

18/6/2012: Irish Trade: April 2012 disappoints

Irish trade stats for trade in goods are out for April. The numbers are, frankly put, alarming.

Remember, we are supposed to generate robust exports growth in order to even sustain the misery of the ongoing austerity. April 2011 SPU envisioned exports growth of 6.8% in 2011 and 5.7% in 2012. Budget 2012 envisioned 2011 exports expansion of 4.6% and 2012 exports growth of 3.6%. April 2012 SPU set 2011 achieved exports growth of 4.1% - down massive 2.7 percentage points on year-ahead forecast of April 2011 and down 0.5 percentage points on Budget 2012 assumption. But more significantly, April 2012 SPU revised 2012 projected exports growth to 3.3%. So within a year, exports forecast for 2012 has dropped from 5.7% to 3.3%.

Even more realistic IMF is projecting exports growth of 3.0% this year (see the first table here).

And the latest data is not encouraging. For tarde in goods only, January 2012-April 2012 period total volume of imports is down 7.17% y/y, while total volume of exports is down 0.87%. Not up 3.3%, but down almost 1%. Trade surplus is up 7.7%, but that is due to fall-off in imports that can mean only two things: either imports accelerate much faster than exports in months ahead as MNCs rebuild their diminishing stocks of inputs, or imports do not accelerate as MNCs cut back exports output. Not a good thing.

And worse. In January 2012, seasonally adjusted exports grew robust 14.1% y/y, but in February they shrunk 9.8%. This was followed by 1.5% growth again in March and now it is followed up by a massive 7.7% contraction in April. Thus average rate of growth in exports in the first four months of 2012 is -0.59%. Things are volatile in goods exports, but that is an alarming trend.

I will deal with detailed exports and trade stats for goods for April in the second post - stay tuned.
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