BDO Ireland
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2024
June 24 dip in exports may be a blip or the start of a new trend, more data needed.

June 24 dip in exports may be a blip or the start of a new trend, more data needed.

June 24 dip in exports may be a blip or the start of a new trend, more data needed.

Carol Lynch, Partner & Head of Customs and International Trade Services, featured in The Irish Independent with her commentary on latest update from CSO. Read Carol's full commentary below.

On initial viewing the value of exports has increased by 6% from Jan - June 2024 when compared with Jan - June 2023, but more interestingly and maybe significantly, we are seeing a softening of exports over the month of June 2024 when compared with both May 2024 and June 2023 figures.

Most of this slump was concentrated in exports of chemicals and related products to the UK, where the value of exports fell by €1.164bn relative to June 2023. By contrast, the value of exports of chemicals and related goods to the USA was identical when compared with June 2023. On a year on year basis, though the value of chemicals and related products exports to the UK has seen a considerable decline relative to 2023, exports to the USA have increased in value by €5.75bn. This demonstrates the flexibility of the Irish pharma sector as it pivots away from COVID era vaccines to other pharmaceutical products.

While this may give rise to some concern, it is important to understand that this is only one data point, and we await to see if this is indicative of a more worrying trend.

The (unadjusted) value of goods exports decreased by €1,798 million (-10%) to €16,575 million in June 2024 compared with June 2023. The value of goods exports for the first six months of 2024 grew by €6,467 million (+6%) to €107,561 million, when compared with the same period of 2023. When seasonally adjusted, exports of goods fell by €330 million when compared with May 2024.

Exports to Great Britain were €1,107 million, which was 7% of total exports in June 2024. The products which accounted for the largest share of exports were Food & Live Animals with €313 million and Machinery & Transport Equipment at €270 million. However, the value of exports of chemicals and related products slumped from €1.383bn in June 2023 to €0.214bn in June 2024.

Carol LynchTax Partner & Head of Customs and International Trade Services, BDO Dublin

Exports to the United States have grown by 23% in the year to date, while exports to Great Britain have fallen by 13%.

Organic chemicals and medical and pharmaceutical products fall under the broader category of Chemicals and Related Products. Organic chemicals are the ingredient raw materials used to make the higher value medical and pharmaceutical products.

In June 2024, exports of both organic chemicals and medical/pharmaceutical products respectively fell in value. However, the value in export of organic chemicals fell by €942M whereas the fall in medical/pharmaceutical products was about €470M.

Exports of Medical & Pharmaceutical Products decreased by €470 million (-7%) to €6,547 million in June 2024 compared with June 2023. This represented 39% of total exports.

Exports of Organic Chemicals fell by €944 million (-27%) to €2,513 million.

Of particular interest is the value of imported goods from China. It is feared that Chinese goods could be dumped on the EU market due to overproduction in China, particularly in respect of Electric Vehicles. Comparing the figures for Jan – Jun 2023 to the same period for 2024, we can see the value of imports from China has increased by €855M year on year and it will be interesting to monitor this data in the coming months.

Despite the slightly disappointing headline export performance, it is still quite encouraging that traditional exports from the food and beverage sectors to UK are marginally ahead year on year, particularly when increased border friction and continued subdued consumer sentiment in this key market is taken into account.