Ireland’s trade performance

This post was written by Alan Matthews

Floyd Norris in the New York Times last weekend put together some interesting comparative charts for twelve countries including Ireland showing trends in their trade up to the beginning of this year. The relatively small dip in Irish exports during the recession comes through clearly. He draws attention to the welcome rebound in trade globally, but classes Ireland among the four Euro laggards including Greece, Portugal and Spain. However, the data for Ireland only go to the end of 2009, whereas for other countries the data includes the first three months of 2010. As all of the rebound in the other countries has occurred in this first quarter of 2010, the charts give an unfavourable, but misleading, impression of Ireland’s comparative trade performance.

6 Responses to “Ireland’s trade performance”

  1. Ronan L Says:

    Would it not make more sense for them to show an index of exports and imports? That would show how much of these surging trade figures are really just re-catching some of the huge losses - which Ireland didn’t have - in the trade dip. (If I remember correctly, EU statistics had Ireland’s year-on-year change barely going below -3%… were the CSO stats really that different?)

    Indeed, if I were trying to come up with a chart that showed Ireland’s trading sector in a bad light, I would struggle to do better than this.

    Much like the NYT’s debt graphic, which also was hardly flattering to Ireland, this time because it was not cognisant of the difference to Ireland’s sovereign spreads between government debt and IFSC debt
    (my bugbear last week: http://www.ronanlyons.com/2010/05/11/untangling-europes-web-of-debt/).

  2. Michael Hennigan - Finfacts Says:

    Available Irish data on merchandise trade is to Feb with detail only on Jan.

    Exports in Jan/Feb 2010 are slightly below same period last year.

    March data will not be issued until next week.

    Did we complain when the gullible Yanks thaought we had invented the free lunch!!

  3. Ronnie O'Toole Says:

    The bigger mistake in this graph is that it (appears) to relate only to merchandise trade. As of Q4 2009, this represents (slightly) less than half of all Irish export trade, and a much smaller portion of imports. The yoy decline in total Irish exports was (at its worst) -5.3% in Q4 2009 according the BOP stats, compared to the -10% to -15% that seems to be in this graph. As such Ireland’s better performance in 2009 is underestimated.

  4. MarcusOC Says:

    @ Ronnie

    I may be way off here, but I’d assume that overall export stats would be more influenced by exports to the EU by US multinationals, which are routed through Ireland.

  5. Ronnie O'Toole Says:

    @MarcusOC

    Not sure what your point is here. Both services and manufacturing are dominated by MNCs, a lot of which is destined for the EU single market, and many of whom are US companies.

    My point was that services exports are not included in the analysis, which they should be. Looking at manufacturing exports only is excusable for most countries, as manufacturing exports dominate. the data is out early, and is available monthly, simply because it is easily documented by customs. Services exports tend to me much slower to emerge, and are not available monthly. However a € earned working for Google is worth no less than a € earned working for Intel. Read Kevin O’Rourke’s Barrington paper for more on this.

    In terms of your specific question, i don’t agree with your use of the word ‘routed’ which suggests that we do not add value here. MNCs spend almost €20bn in the Irish economy, adding value.

  6. MarcusOC Says:

    @ Ronnie

    I’ve a bad habit of neglecting to check back on posts, so this is a bit late and you’ll likely not see it. Anyway, my point was more general and probably shouldn’t have been directed at you.
    My understanding is that when a large US MNC like Microsoft suddenly sees Windows sell ten times as well as expected in EMEA, it will boost our export stats. This will happen in spite of very little change in payments to factors in Ireland (Windows is almost entirely developed in the US, marketing/logistics/licensing is in Ireland as far as I know). For sure, we do add value, but in many cases the payment to our factors is only weakly linked to output. Thus I would argue that the export stats are often a weak indicator of real economic activity amongst Irish exporters.

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