Republic’s exports fall amid economic concerns in Europe

EXPORTS from the Republic fell by 14% in June from a year earlier as woes in the eurozone took their toll on the economy and uncertainty over Brexit hit sales to the UK.

But despite the poor June export figures, the overall performance in the first half of 2019 was still better than expected.

Exports to the EU plunged by €552m (£507m) or 9% in the month from a year earlier, a period that saw the German economy contract along with that of the UK, where exports from the Republic fell by 6% to €1.29m (£1.2m) in June.

Seasonally adjusted goods exports decreased by €1.92bn (£1.76bn) to €11.53bn (£10.6bn) in June from May and there was a big hit from aircraft to the transport sector, which saw a drop of 82% in exports from a year earlier.

Exports to the US rose strongly in June, bucking the lower trend, to €3.49bn (£3.2bn) from €3.3bn (£3bn).

Compared with the performance of other heavily export-oriented economies, the Republic appears to be holding up relatively well and its exposure to the US economy, still by far the fastest growing in the developed world, is a boon while the low level of exposure to China has helped exporters avoid pitfalls that have befallen Germany.

The German Federal Statistics Office recently said exports from the eurozone’s largest economy fell by their largest amount in three years in June with an 8% drop from a year earlier and the economy overall slipped into negative in the second quarter.

Brexit, however, could deliver a big shock to exports next year. The UK economy has already been whipsawed by stockbuilding and plant closures ahead of the March 31 date for leaving the EU and the new October 31 quit date is looming fast.

From 2011-2015, the value of Irish exports of machinery and equipment to the UK grew at an annual average rate of just over 13% while the equivalent figure from 2016, the year in which the Brexit referendum was called, through to 2018 showed a decline of 6.5% a year.

But agrifoods exports to the UK have held up well, rising by 9.2% in 2017 and by 3.1% in 2018 after a sharp fall in 2016. Overall, machinery and transport sales were a big positive for exports in the full six month period, rising to €17.99bn (£16.5bn) in the first half of 2018.