Tuesday, August 23, 2011

23/08/2011: Trade Figures for June - an awesome performance by the sector

Latest trade stats are out for June 2011 for Ireland and the results are, overall, excellent:
  • The seasonally adjusted trade surplus increased by 7.54% mom (a whooping 22.45% yoy) to €4,079m. This is the highest monthly surplus ever recorded in nominal seasonally-adjusted terms.
  • Compared to June 2009, trade surplus increased 7.48% (+€283.8 million) and compared to June 2010 trade surplus is up 22.45% (+€747.9 million).
  • The non-seasonally adjusted trade surplus in June 2011 was €4,473m comprising exports of €8,343m and imports of €3,870m. Per CSO: "This is the highest trade surplus since June 2001.
  • Imports came in at a weak €3,821 million in seasonally-adjusted terms in June 2011, down 7.48% on June 2010 and up 2.83% on June 2009.
  • Exports posted the best seasonally-adjusted performance since February 2011, reaching €7,900 million in June 2011, up 5% (+374.6 million) mom. Exports rose 5.89% yoy (+€439.1 million) and 5.18% (+€388.90 million) on June 2009.
As chart above shows, trade surplus has broken through short-term flat trend that run from roughly speaking January 2009. Which, of course is the good news. Build-up of inputs imports in April 2011 is now exhausted, as indicated by the fact that we have moved to a much more intensive position in exports as determined by imports volumes (chart below). This suggests that trade surplus can shrink in months to come as rebuilding of inputs inventories set in. Regardless, however, June figures are truly spectacular.
For H1 2011:
  • Imports stood at €24,934.4 million, up 8.47% (+€1,946.4 million) year on year
  • Exports were at €46,244.9 million, up 5.43% (+€2,423 million) yoy and
  • Trade surplus stood at €21,310.3 million, up 2.29% (+€476.4 million)
The above, of course, provides a backdrop for the claims that our exports-led recovery (which is roaring ahead) is going to underwrite overall economic recovery (which is not happening). Just think, the entire trade surplus increase for 6 months this year would be barely enough to cover 2.6% of our fiscal deficit through June 2011.

Per CSO (using final figures through May) for the first five months of 2011 compared with those for 2010:
  • Exports increased by 6% to €38,565m:
  • Exports of Medical and pharmaceutical products increased by 14% or €1,362m,
  • Exports of Organic chemicals rose by 7% or €582m and
  • Exports of Dairy products increased by 47% or €217m.
  • Imports increased by 12% to €21,123m
  • Imports of Other transport equipment (including aircraft) increased by 34% or €497m
  • Medical and pharmaceutical products by 22% or €318m and
  • Imports of Petroleum rose by 17% or €305m.
These figures were achieved against improving terms of trade (lower TT readings) through May (the TT data is lagged 1 month behind the Trade data), as shown in the chart below:
As the result of this, long-term relationship between terms of trade and exports implies that June performance was actually below exports levels consistent with current reading of terms of trade. This suggests that in July and August there is some room for exports increases despite the slight deterioration in the terms of trade month-on-month in June.
On the net, therefore, very positive set of figures on trade from Irish exporters! something truly worth cheering.

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