Exports weakened in October, indicating that conditions remain difficult on international markets, according to the latest figures from the Central Statistics Office.
They showed that exports in October were 3 per cent lower than September, while imports fell by 5 per cent. The October trend was a reversal after a healthy 6 per cent monthly increase in exports in September.
The latest figures show total exports of €6.99 billion in October and imports of €3.84 billion, leaving a surplus of €3.15 billion.
In the first nine months of the year, exports of €60.5 billion were running 16 per cent below the same period in 2002, while imports of €34.65 billion were down 19 per cent. However, the CSO warns that comparisons between 2003 and 2002 have been distorted by unusual trends in the electrical sector. This is believed to relate to UK-based VAT frauds, which artificially inflated trade in electrical goods between Britain and Ireland for a period up to late 2002.
The CSO says that trade in the affected sector was not as large from September 2002 onwards. This suggests that the October figures may provide a more valid year-on-year comparison than those for the first nine months. These show an almost unchanged level of exports from the same month last year and imports down about 5 per cent.
Separate data, showing a recovery in industrial production in October, suggest that exports may pick up in the months ahead.
Meanwhile, CSO balance of payments figures show a current account deficit of €316 million in the third quarter of the year, similar to the previous quarter. The current account deficit for the first nine months at €1.74 billion is well above the €736 million recorded for the same period last year.
The latest figures suggest that the current account deficit for the year may be above the recent €436 million forecast from the ESRI, but below the Central Bank's €2.6 billion estimate.
The current account balance is made up of a sizeable surplus on merchandise trade, totalling €24.08 billion in the first nine months, and a deficit on invisible items, which came to €25.82 billion. The invisible balance is affected by a heavy deficit on services trade and profit outflows from multinationals.
A notable feature this year has been a levelling off in multinational profits. A sharp rise in these figures in recent years had led to growth in Gross Domestic Product (GDP) greatly exceeded growth in Gross National Product (GNP). In the first three quarters of 2003, multinational profits totalled €20.6 billion, down from €21.9 billion in the same period the previous year.
This fall-off suggests that GNP growth may exceed GDP growth this year quite substantially as the fall-off in repatriations acts as a drag on GDP.
