The decline in Irish exports can be attributed to a natural dip in the demand for pharmaceuticals related to the Covid-19 pandemic. A noticeable slowdown in global demand has adversely affected Irish goods exports, with the pharmaceutical sector being particularly impacted by a decrease in the demand for Covid vaccines.
Recent data from the Central Statistics Office (CSO) underscores a 5 percent (€6.5 billion) drop in the value of merchandise exports for the initial eight months of this year (2023), totaling €133 billion, compared to the corresponding period in 2022.
This reversal marks the first such decline in several years and is primarily influenced by the economic deceleration in Ireland's major export markets, namely the EU, the UK, and the US. Additionally, the decline reflects a natural downturn in the demand for Covid-related medicines, which had notably augmented Irish exports during the peak of the pandemic.
The CSO's findings reveal that the adjusted goods exports for August amounted to €16.5 billion, a slight decrease from the previous month. Notably, exports of organic chemicals witnessed a substantial decline of €3.3 billion or 66 percent, down to €1.7 billion compared to August last year.
Concurrently, seasonally adjusted goods imports fell by €1.3 billion (11 percent) to €10.6 billion, resulting in a trade surplus of just under €6 billion for August. Highlighting the methodology, the CSO emphasised that seasonal adjustment is utilised to compare month-to-month data, eliminating fluctuations arising from seasonal patterns in trade.
Among the key findings, the EU accounted for €6.2 billion, constituting 38 percent of the total goods exports in August, with significant portions destined for Belgium, Germany, and the Netherlands. Notably, the US emerged as the principal non-EU destination, accounting for €5 billion (32 percent) of total exports during the same period.
Exports to Britain amounted to €1.3 billion, representing 8 percent of total exports in August, with prominent product categories including chemicals and related products, food and live animals, and machinery and transport equipment. Moreover, from January to August (2023), exports to Britain witnessed an increase of €1.3 billion (11 percent) reaching €12.7 billion compared to the same period in 2022.
Analysing recent trends, Janette Maxwell, director in tax at Grant Thornton Ireland, pointed out a significant decline in goods trade between Ireland and Britain, highlighting a 14 percent decrease in imports from Britain to Ireland and a 15 percent decrease in exports from Ireland to Britain in August 2023 compared to the previous year. Expressing similar concerns, Carol Lynch, partner at BDO Ireland and head of customs and international trade services, stressed the importance of anticipating border procedures that will be enforced at the Britain border in early 2024. Lynch emphasised the potential friction, especially for food exporters from Ireland to Britain, urging Irish exporters to proactively prepare for this development.