THE SLOWDOWN in consumer spending was reflected in the value of imports in October, which fell 17 per cent compared to the same month last year.
Detailed external trade data from the Central Statistics Office (CSO) show imports of road vehicles are down 19 per cent over the first nine months of the year and almost 50 per cent when September is compared with the same month in 2007.
On a more positive note, the sharp decline in the price of oil since its peak at $147 in July has seen the cost of energy imports fall to €396 million, lower than the same month last year, with further falls expected next year.
Ronnie O'Toole, chief economist with National Irish Bank, said the correction taking place in the domestic economy should see an improvement in the balance of trade as imports are falling more quickly than exports. In October, the seasonally adjusted trade surplus stood at €2.9 billion.
Irish merchandise exports increased by 2 per cent in October in value terms to €7.3 billion, while imports fell 3 per cent to €4.38 billion.
Mr O'Toole notes exports are proving relatively resilient and the sector may be "more competitive than is often portrayed".
Exports of food and beverages to the UK were 3 per cent lower in September compared with a year earlier, partly due to the weakening sterling which makes Irish exports less attractive.
Mr O'Toole said the move by the computer manufacturing sector out of the State to Asia and eastern Europe has seen the pharmaceutical sector emerge as the most important export product category, accounting for more than half of all goods exports.
Exports to the UK in October, largely in line with the same month last year, reflected the performance of the chemical and pharmaceutical sectors, he added.
One of the sharpest declines in imports in October was in components for the computer manufacturing industry, which dropped to €534 million this September, compared with almost €800 million in the same month in 2007.
Mr O'Toole suggests this decline may reflect a slowing of activity at Dell. Exports from this sector were also lower, slipping from €1.15 billion in September 2007 to €782 million a year later.
Alan McQuaid, economist with Bloxham stockbrokers, said "it looks like 2009 will be the most difficult year for Irish exporters for some time, though the overall net trade performance will again be helped by weaker imports due to falling consumer demand".
