Value of exports slump pushing trade surplus to 2008 levels
THE value of exports slumped 5pc last year, pushing the annual trade surplus to its lowest level since 2008 as the impact of pharmaceuticals coming off patent kicked in.
But the end of 2013 showed signs of recovery, with seasonally adjusted export values rising 11pc in December compared with the previous month, preliminary figures from the Central Statistics Office show.
The trade surplus narrowed during the year by 12pc, driven by a sharp fall in the value of pharmaceutical and medical exports. The industry has been badly hit by the effect of the so-called patent cliff, a fall-off in the value of pharmaceutical sales as some drugs made here lose intellectual property protection.
Alan McQuaid of Merrion Stockbrokers said the effect of the patent cliff will be felt for some time yet.
“The pharmaceutical sector accounts for approximately a quarter of total Irish exports and half of merchandise exports,” he said.
“According to a research paper published by the Department of Finance last year, Ireland will continue to feel the negative impact of the patent cliff for some time to come, though the magnitude is unlikely to be as great as was felt in 2012.
“Furthermore, the headline impact should be offset to some extent by reduced imports through royalty payments.”
The trade surplus stood at €37.26bn at the end of last year. Imports rose 1pc over the year.
Specialist bank Investec said the figures weren’t surprising.
“We have known for some time that the 2013 outturn would be underwhelming, not least given the impact of the ‘Patent Cliff’, so today’s release comes as no surprise,” said Investec economist Philip O’Sullivan.
“Looking ahead, with releases such as the export component of PMIs pointing to robust appetite from overseas markets, we expect that the merchandise trade performance will see a uptick in 2014.”