Tuesday, August 26, 2014

26/8/2014: Irish Trade in Goods: H1 2014 results

Time to update H1 results for Irish external trade in goods. As a note: CSO does not provide any information on trade in services except as a part of quarterly national accounts.

Irish exports of goods in H1 2014 stood at EUR44.096 billion, down 0.54% on H2 2014 and up 1.45% y/y. Compared to 3 years average, exports are down 2.27%.

Compared to other H1 records, H1 2014 is up on H1 2013, but down on H1 2011 and 2012. Current reading is slightly behind EUR44.142 billion average H1 reading for 2000-2014 period and well below EUR45.077 billion H1 average for 2009-present.

Irish imports of goods rose in H1 2014 to EUR26.189 billion an increase of 7.8% on H2 2013 and a rise of 5.96% y/y. Imports are now up 7.28% on 3 year average and are at their highest level since H2 2008.

As the result of these trends, Trade surplus (for goods trade alone) has fallen to EUR17.907 billion, down 10.65% on H2 2013 and down 4.49% y/y. Compared to 3 year average, trade surplus is down 13.53%. H1 2014 trade surplus now stands at its lowest level in 6 years.

Charts below illustrate the above trends.

As profit-taking in the pharma and chemicals sectors is shifting toward tax optimisation based on off-shoring (as opposed to booking profits into Ireland), ratio of exports to imports continues to fall from the pre-patents-cliff peak:

Chart to illustrate:

However, a welcome sign of return to growth in exports in H1 2014 compared to H1 2013 means that our trade in goods regime is now out of the 'Pain Spot' of simultaneously shrinking trade balance and contracting exports that it occupied in 2010, 2012 and 2013. Down to continued decline in trade surplus, however, it is still not in the 'Sweet Spot' of exports-led recovery:

So overall, trade in merchandise is providing negative contribution to GDP growth y/y so far in 2014. Let's hope H2 will reverse this.

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