Thursday, March 20, 2014

20/3/2014: Trade in Goods & Trade Balance Dynamics for Ireland: January 2014

As noted in the earlier post, CSO released new data on Irish merchandise trade, covering January 2014. I discussed the validity of the argument that improved competitiveness is a driver of Irish exports here: http://trueeconomics.blogspot.ie/2014/03/1932014-competitiveness-might-have.html and as promised, now will discuss top-level data on trade flows.

Starting from the top:

Based on unadjusted (seasonally) data:

  • Total imports into Ireland (goods only) amounted to EUR4.528 billion in January 2014, which is up 1.93% y/y. This is shallower rate of increase in imports than the one recorded in December 2013 (+16.9% y/y).
  • 3mo cumulated imports for the period November 2013-January 2014 were up 8.2% on the same period of 2012-2013.
  • January 2014 marks the highest level of monthly imports since March 2012 and the busiest imports January since 2008.
  • Total exports from Ireland (goods only) stood at EUR7.0306 billion in January 2014, up 4.48% y/y, which is a shallower increase than 13.41% rise recorded in 12 months through December 2013.
  • 3mo cumulated exports for the period November 2013-January 2014 were up 2.05% on the same period of 2012-2013.
  • January 2014 levels of exports are not remarkable by any means possible, representing only the second highest level of January exporting activity since January 2008.
  • Trade balance in January 2014 stood at EUR2.5026 billion, up 9.42% y/y which is an improvement on December 2013 annual rise of 7.18%.
  • 3mo cumulated trade balance for the period November 2013-January 2014 was down 6.64% on the same period of 2012-2013.
Three charts to illustrate:



In the chart above, notice disappointing performance in exports relative to trend (red line) and to 6mo MA (black line). Also note poor performance of trade balance relative to trend and the seeming breaking out of trade balance away from the trend line down.

The same is confirmed in the seasonally-adjusted series plotted below:


So exports have risen y/y, primarily due to a truly abysmal January 2012. But exports are still trending below an already virtually flat trend. You might think of this as being a story of some short term improvement, amidst ongoing long term weakness.
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