Minister Ahern welcomes positive trade figures

Minister for Trade and Commerce, Mr. Michael Ahern, T,D., today (Thursday 19^th January 2006) welcomed the trade statistics released by the CSO. The figures show that exports increased by 7% in November 2005 relative to October 2005, indicating a late surge by Irish exporters towards the end of the year. Imports decreased by 9% in the same period. Minister Ahern expressed his satisfaction with the November trade figures and the overall trend of the figures during 2005. The figures show a 4% increase in exports for the 10 month period January-October 2005, relative to 2004. The differential for 2003-2004 was just 2%.

“Assuming that these figures will also be reflected in the end-year position, I consider this to be a very positive out-turn for a year in which trading conditions worldwide remained difficult. The improvement can largely be attributed to an increase of 13% in organic chemicals, of 12% in essential oils and 3% in computer equipment. I particularly welcome the fact that exports of computer equipment increased by 3% during the period January-October 2005. This is a reversal of the situation over the past 18 months where the trend appeared to be downward.

In light of low growth rates in the major European economies, together with the slow recovery in the United States, I think this was an excellent performance by Irish companies. We are continuing to hold our own and are in a strong position on which to build our exports for 2006,” the Minister said.

Imports increased by 9% during the period January-October, 2005, relative to the same period in 2004. Minister Ahern attributed this mainly to the 45% increase in the value of oil imports, reflecting the huge increases in oil prices since the beginning of the year. “When you consider that oil prices on the world market increased during 2005 by as much as 70% in Euro terms, it is to be expected that this would be reflected in an increase in the overall value of imports,” the Minister said. The Minister noted that other factors contributing to the increase in imports were a 13% increase in imports of computer equipment and an 18% increase in imports of road vehicles. “Increases in imports in these high-end commodities reflect the increased spending power of Irish consumers,” the Minister added.

“As to the geographical distribution of trade, the European Union continues to be our largest market, accounting for 63% of total exports. The United States continues to be our largest single destination for Irish exports, taking just under 20% of the total. I am very pleased that despite continuing difficult trading conditions in 2005, Irish exports to the USA remained stable. And while exports to the UK mainland decreased by 3%, exports to Germany and Italy remained more or less static, with exports to France actually increasing by 13%.” The Minister noted that while imports from China increased by 33%, exports to China increased by 37%. “While there is a sizeable trade deficit with China, I believe that the priority which the Government has been giving to China and the Asia region as a whole, through the Asia Strategy, is beginning to show results and will lead to significant increases in Irish exports to this region in the coming years,” Minister Ahern concluded.

Responding to recent comments by John Whelan, CEO of the Irish Exporters Association, regarding Ireland’s export performance during 2005, Minister for Trade and Commerce Michael Ahern, T.D. said:

“As a small, open market economy, exporting over 90% of its GDP, Ireland is hugely dependent on its exporters and their ability to succeed in difficult global markets and to increase market share. I recognise the difficulties that Irish exporters are currently facing and I share their concerns. Nevertheless, I believe that the recent performance of Irish exporters indicates that they are coping well with the difficulties presented by the current global trading environment, and this is borne out by the most recent trade figures.”

With regard to the falling value of the Euro against the Pound Sterling and the US Dollar, Minister Ahern said that “while it did not significantly increase Irish export performance during 2005, this can only be seen as a welcome development for Irish exporters in the long run. I would expect to see the exchange rate factor translating into increased sales of Irish goods and services to other countries during 2006.”

Regarding cost competitiveness and the impact of rising oil prices on inflation, the Minister said that, “although oil prices rose significantly in 2005, inflation only increased from 1.9% to 2.5 %. And while our manufacturing performance has been muted over the past year, I believe that this is an inevitable pause following the very strong growth of the previous decade or so, averaging 11% per annum, and amounting cumulatively to 160%.”

“Overall, the economy grew by 5% in 2005, the highest in the Eurozone and on a par with world GDP growth outside the Euro area. In December last, the Live Register fell by over 1,000, and the unemployment rate in Ireland remains one of the lowest in the EU, the Minister added.”

“While there are concerns, which I share, in regard to threats to Ireland’s competitiveness and rising cost base, I remain confident that the continuing growth of our economy at a more manageable rate, a new round of Social Partnership bringing with it continuing economic and social harmony, and fiscal and regulatory measures introduced by the Government, as necessary, will result in a continuance of the economic prosperity which is the envy of our European partners and, indeed, worldwide,” the Minister concluded.

ENDS

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