The value of Irish exports fell by 4 per cent to €9 billion in August while imports rose by 4 per cent to €5.4 billion.
This resulted in a trade surplus for the month of €3.6 billion, down €482 million or 12 per cent on the previous month.
Nonetheless, the latest trade numbers from the Central Statistics Office (CSO) point to another positive year for Irish exports with the value of the State's export trade for the eight-month period between January and August put at €80.2 billion, up 3 per cent on the corresponding period last year.
Ireland’s trade with Britain also appears to be unaffected by Brexit with exports and imports remaining largely steady.
The monthly numbers were, however, driven lower by a decline in exports of organic chemicals, which fell by 45 per cent to €1.4 billion, and a dip in exports of medical and pharmaceutical products, which fell 4 per cent to €2.6 billion.
Exports of food and live animals increased by 16 per cent to €915 million with largest changes recorded in exports of dairy products.
The EU accounted for nearly €4.7 billion or 52 per cent of Ireland’s exports in August, with Belgium accounting for the largest single share.
Antwerp is one of the largest global drug redistribution hubs and receives most of the State’s pharma exports which are not destined for the US. The US was the main non-EU destination, accounting for 25 per cent or €2.2 billion of total exports in August.
The UK’s looming departure from the EU poses a serious challenge to Britain and Ireland’s trading relations.
While the UK government has signalled it will leave the EU’s customs union in 2019, it has proposed a continued close association for a time-limited period to minimise disruption and allow a smooth and orderly transition to the new arrangements.
“One can only speculate as to how Brexit will impact Ireland in the coming months and years, but there is clearly likely to be a negative impact on trade,” Merrion economist Alan McQuaid said.
“The UK is the second largest single-country for Ireland’s goods and the largest for its services. At the same time, Ireland imports 30 per cent of its goods from the UK,” he noted.
Mr McQuaid said SMEs, particularly in the agri-food and tourism sectors, will likely be more affected than larger companies by the introduction of tariffs and barriers to trade.
While the trade outlook going forward remains clouded in uncertainty, he said he was still anticipating another solid trade performance this year. “Indeed, based on the very positive start to 2017, with the trade balance in the first eight months running €1.3 billion above that of the same time last year, another record surplus now looks on the cards of around €46-47 billion,” he said.
