Wednesday 5th January 2010
Exports in 2010 Reach Highest Level Ever, but
Fears that future Growth May Not be fast enough to meet IMF targets

The Irish Exporters Association (IEA) issued today (Wednesday 5th January 2011) its Review of 2010 and Projections for 2011 which showed that exports in the 4th quarter of 2010 grew by 18%, bringing total exports of goods and services for the year to €161 billion, the highest export figure ever recorded, and represents a growth of 6.7% on the previous year. The IEA is projecting that exports of goods will grow by 5% in 2011 with the services sector forecast to grow by 10% giving an overall growth forecast for the year 2011 of 7.2% pushing Ireland’s total exports to a new high of €172.6 billion.

According to Mr John Whelan, Chief Executive of the Irish Exporters Association, while the growth in 2010 and anticipated growth in 2011 was indeed welcome, the IEA fears that it will not be enough to ensure that economic growth targets laid out in the IMF four year plan will be met.
The main points in the IEA review of 2010 are:
A significant return to growth in Irish exports resulting from an economic bounce back in many international markets.Exports to North America were particularly strong with sales to our largest market, the USA, up by 18% in the year, and sales to Canada up by 27%.The emerging markets of Brazil, Russia, India, and China (BRIC countries) showed an increase of 12%.Germany, the largest of the EU markets, provided a much needed boost to eurozone exports with Irish exports increasing by 42%.Mr Whelan, commenting on the results for 2010 said that despite the difficult economic conditions at home and in global markets that the Irish exporting sector was able to make significant gains, indeed, to set new highs for total exports. “The key drivers of the export expansion, especially during the final quarter of 2010, were the manufacturing and agri-food sectors,” said Mr Whelan. He noted that during the fourth quarter manufactured or merchandise exports grew 27% compared to the same period the year before while services exports also grew at an impressive rate of 12% in the final quarter compared to the same period a year earlier.
“There were clear signs through out the whole year that manufacturing and agri-food sectors were repositioning themselves, shedding costs, moving up the value chain, and exploiting renewed growth in global markets,” said Mr Whelan. He also said that the statistics indicated that there was a clear shift away from dependence on the UK market in favour of export developments in North America, South America and Asia.

Outlook for 2011

The Irish Exporters Association is optimistic that Irish exports will continue to grow in 2011. “Ireland’s export performance depends greatly on growth in world trade and according to the OECD’s latest forecast world trade growth is expected to ease down from the 12.3% experienced in 2010 to 8.3% in 2011, and to slow ever further to 8.1% in 2012,” said Mr Whelan. He noted that international currency exchange rates versus the euro are expected to be favourable again during 2011 with the positive trend which supported Irish export growth in 2010 to continue against both sterling and the US dollar.

The Irish Exporters Association’s Review of 2010 and Projections for 2011 says that corporate profitability was robust in 2010 and, consequently, business investment is expected to be a major driver of further recovery in 2011. The IEA says that this growth in corporate profits enabled direct investment into Ireland to increase last year by €2.6 billion to reach a new high of €171.9 billion. “We confidently expect that this direct investment will grow further in 2011.” Mr Whelan also noted that assets under management in Ireland increased by 8% in 2010 to reach €2.48 trillion demonstrating the strength in depth of the International Financial Services Centre (IFSC) and its continued ability to attract services-based export activity.

The Irish agri-food sector based on global demand, improved commodity prices and changes in the EU policy on agricultural output incentives increased its export output by some 8% in 2010 and growth of this magnitude is expected to continue in 2011. The life sciences sector which includes products such as chemicals, pharmaceuticals and medical devices currently accounts for some 63% to total Irish merchandise exports grew by 12% in 2010 and the IEA expects that the sector will continue to grow in 2011, but perhaps at a more moderate rate.

The IEA is projecting that the total exports of goods will grow by 5% in 2011 with services forecast to grow by 10% giving an overall growth forecast for the year 2011 of 7.2% pushing Ireland’s total exports to a new high of €172.6 billion.

Much More to Be Done

The Irish Exporters Association while being positive about the continued growth of exports believes that much more needs to be done. The IEA believes that the rate of unemployment currently at 13.25% will not fall during 2011 due to the planned reduction in public sector employment and the much anticipated reduction in employment in the banking sector.
“The 2011 projection of a growth of 7.2% for total Irish exports is still well below the rate of growth in exports required to enable the targets in the IMF four year plan to be achieved,” said Mr Whelan. He added that for those targets to be met the underlining export growth rates would have to be in excess of 10% per annum for the next four years made up of indigenous export growth of 8% and foreign multinational growth of 11% per annum. “If growth rates of this magnitude were achieved they would lead to 300,000 new jobs in the private sector and we believe that job creation on this scale is required to support the achievement of Ireland’s GDP and tax targets,” said Mr Whelan. He added that the OECD estimates that a 1% fall in unemployment is capable of generating a 0.8% increase in GDP.
The Irish Exporters Association is convinced that to reach the higher growth levels implicit in the IMF four year plan, a number of initiatives other than those currently planned by government will be required. The IEA has proposed two major initiatives which it believes, if implemented, will help to bring about the necessary growth. They are:
The creation of Special Export Zones in Ireland geared to support emerging economies entering the EU27 market, andThe creation of Global distribution centres to support the retention and expansion of major manufacturing operations with special distribution facilitation, similar to those supporting manufacturing industry in the Netherlands.Mr Whelan concluded by saying that the IEA is confident that Irish exporters, given the right programmes and incentives, are capable of upping their game to achieve, indeed, surpass the growth targets that are required.

ENDS

The full text of the Irish Exporters Association’s Review of 2010 and Projections for 2011 is available to DOWNLOAD HERE

For Further Information contact John Whelan
Telephone: 087 9271243