2010
Press Release
Immediate Release 4th May 2010
Irish Exporters First Quarter 2010 Review
Food Exports Continue Sinking, But Services Exports Power Ahead
The Irish Exporters Association (IEA), today (4th May 2010) released their first quarter Review.
The IEA Report stated that the first quarter exports continued the downward trend in manufactured output from Ireland, with a fall of 5% compared to the same period last year. The primary impact arising from the 35% fall in computer hardware exports in the quarter , where the full impact of the Dell plant closure and the reduction of IBM manufacturing of � servers�, as well as other peripheral products were evident . The double digit growth in the Medical and Pharmaceutical exports which were a feature of recent year activity , eased back to more modest growth in quarter one.
The food and drink exports continued to be heavily affected by the weakness of Sterling, and fell by just under 5% in the quarter. This continued fall in exports from the sector comes on top of the 12% fall in exports from the sector over the full year in 2009 and is indicative of a sector in crises.
John Whelan, Chief Executive of the IEA stated at the release of the report;
"The continuation of a low value sterling currency , a depressed UK consumer market , export credit scheme reductions and increased energy costs due to carbon taxation with the related increase in packaging costs , has put the food export sector into crises conditions."
He went on to say;
"In such an environment, food enterprises seem to be walking on quicksand, their only goal being to minimize their losses."
Mr. Whelan, went on to criticize the Government for holding back on releasing the outstanding €42 million of funds agreed last year as part of the Stabilisation Fund , and the €117 million outstanding from the Enterprise Employment Scheme.
He further stated;
"These fund schemes were approved last year to help exporters survive the global downturn and help them to reduce costs and help them gain sales in recession-hit overseas markets . It is beyond belief that at this point in time with so many indigenous exporters struggling to survive that just over 50% has been released ."
However, the IEA Review identifies that the Irish export industry is very sector specific, and one size does not fit all sectors.
Hence the Review shows that the Services industry resumed growth, with an expansion of just under 7% in the value of exports in the quarter, compared to the same period last year. The computer services and business services were the main growth sectors, and reflect the continued re- configuring of our computer industry away from manufacturing into services support activity, but also reflects the continued attractiveness of Ireland as a location for high end services investment.
The World Trade Organisation (WTO) recently released their global services trading statistical analysis for 2009, and showed Ireland now ranked the 9th largest exporter of commercial services globally, up from 11th position in 2008.
John Whelan commented on the internationally trading Services exporters;
"The very strong growth in Services exports underlines the strength of our internationally trading services sector and offers very positive indictors of Irelands potential to be a global leader in this sector."
Table A. Summary January - March Comparison
| €Million | 2009 Actual Jan-March | 2010 Forecast Jan-March | Diff | % Change |
| Merchandise | 21, 838 | 20,759 | -1079 | - 5.0 % |
| Services | 16, 048 | 17,160 | +1,112 | +6.9 % |
| TOTAL | 37, 886 | 37,919 | +33 | +0.1 % |
Source; CSO for 2009, IEA estimates for 2010
Forecast for full year
Some improvement in the performance of merchandise exports is in prospect for the balance of 2010, with Irish exporters set to benefit from favourable developments in international demand and improvements in Irish cost competitiveness. However, unless there is a major appreciation in the value of sterling our indigenous exports will struggle to improve, despite the private sector wage reductions and the more competitive energy cost base.
The IEA chief executive stated;
"Irish exporters will be hoping for a change of government in the UK, to one with a commitment to a strong Sterling, and enable a restoration of more normal trading conditions in the main market for indigenous exports."
The Medical and Pharmaceutical export growth of recent years has reached close to full capacity and now accounts for over 60% of merchandise exports. The double digit growth of recent years is unlikely to continue through 2010. And there is little prospect of any expansion of our computer hardware exports.
Hence , a full year decline of 3% approximately is forecast for merchandise exports in 2010.This is in stark contrast to the expected 9.5% growth in global merchandise trade predicted by the WTO for 2010.
The Services export sector saw a return to strong growth in the final quarter of 2009, where a 5% growth was recorded, this continued into 2010, and is expected to gather momentum as the international demand continues to grow for software and business services .The IDA continued ability to attract new foreign investors into the sector is also driving exports form the sector. Hence, a 7% growth in services exports is forecast for the full year 2010.
The performance of the internationally trading services companies will help drive total exports of goods and services into positive growth of just under 2% for the full year.
Table B. Exports Full Year 2010-Forecast:
| €Million | 2009 Actual Jan- Dec | 2010 Forecast Jan -Dec | Diff | % Change |
| Merchandise | 83,523 | 81,017 | - 2,506 | - 3.0 % |
| Services | 69,333 | 74,186 | +4,853 | +7.0 % |
| TOTAL | 152,856 | 155,203 | +2,347 | +1.5 % |
Source; CSO for 2009 actual, IEA for 2010 forecast.
END
Copies of the Full Review can be seen on the IEA Website. Click here to view.
For further commentary you may contact;
John Whelan, CEO of IEA, mobile: 087 9271243
Or
Gillian Ryan, Communications and Events Manager
Email: gillianryan@irishexporters.org
Phone: 01 642 4171
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