Irish-based exporters have revised downwards their forecasts for this year, following a tough first quarter for merchandise exports, with manufacturing exports “severely impacted” by the recession across the euro zone.

According to the Irish Exporters Association (IEA), the first quarter of 2013 was a mixed bag for exports, with merchandise exports contracting "severely", down by almost 10 per cent. Services exports continued to advance, rising by 8 per cent in the first quarter and accounting for more than half of all exports. This was not enough to stem the decline in total exports, which fell by 1.4 per cent to €44.1 billion.

The IEA predicts that the manufacturing sector will continue to contract in coming months due to the stagnation of demand in the EU countries, although a return to some growth for merchandise exports in the second half of 2013 is expected, driven by the agri-food and drink sectors.

Overall, the IEA is forecasting a 2.3 per cent decline in merchandising exports for 2013, and a 7.5 per cent increase in services exports, leading to overall growth of 3.3 per cent. This will push total exports ahead by €4.6 billion to €187 billion for the year.