Exports down 29% in May due to big drop in pharma exports

New figures from the Central Statistics Office show that Ireland’s exports decreased by 29.1% to €16.5 billion in May from €23.2 billion the same time last year when exports were dominated by frontloading of pharmaceutical exports to the US.

The annual drop had been expected.

Today’s figures show that exports of medical and pharmaceutical products fell by 58.8% to €5.6 billion in May from €13.5 billion the same month last year. They still represented 33.9% of total exports for the month.

The CSO said that Ireland’s top exporting partners in May were the US, the Netherlands and Great Britain, with Ireland exporting 28.6%, 10.7% and 9.8% of total export goods respectively to these countries.

It noted that exports to Great Britain increased by 26.3% to €1.6 billion in May compared with €1.3 billion in May of last year.

Meanwhile, the unadjusted value of imports in May increased by 17.5% to €13.1 billion.

Today’s CSO figures show that when seasonally adjusted, both exports and imports of goods fell. This led to a decline of €1.2 billion in the trade surplus to €3.5 billion in May compared with €4.8 billion in April.

Robert Purdue, Head of Client Portfolio Management at global financial services firm Ebury (Ireland), said that today’s trade figures point to continued pressure on Ireland’s export sector, with goods exports falling by almost a third compared with May last year.

“The sharp decline in exports to the US is continuing to hammer Irish businesses exposed to transatlantic trade, as exporters continue to navigate a more restrictive and uncertain global trading environment,” he said.

But he added that on a more positive note, the increase in exports to Great Britain demonstrates the ability of businesses to adapt as trade patterns continue to evolve.

“However, exporters are not off the hook yet. Renewed tensions in Iran, despite recent signs of a potential resolution, have already pushed up oil prices and could put further pressure on energy costs, input prices and global shipping routes,” he added.

Mr Purdue said that while he expects the European Central Bank to take a very cautious approach on interest rate hikes, the euro zone remains highly exposed to oil-inflation risks.

“Much will depend on how geopolitical developments unfold in the months ahead, with businesses needing to prepare for potentially tighter financing conditions and continued uncertainty,” he added.