Drop in drug exports hits trade figures

Thursday 14 March 2013 18.55
Goods exports rose month-on-month during January but were lower than in January 2012
Goods exports rose month-on-month during January but were lower than in January 2012

The value of goods exports in January fell sharply compared to the same month last year.

Goods valued at €6.79 billion were exported from Ireland during January, down €882m compared to January 2012.

The seasonally-adjusted export figure of €6.85 billion was 0.5% higher than in December, however.

Merrion economist Alan McQuaid said the CSO figures were weaker than expected.

"The export sector has been the main driver of Irish economic activity in recent times and will remain the key growth engine for some period to come," he said.

"But there are clear downside risks in the short-term, especially in relation to external demand, as well as the strength of the euro, especially versus sterling".

The biggest factor in dragging down the export figures was a €681m fall in the value of organic chemicals shipped during the month compared to January 2012.

The medical and pharmaceutical products also slid by €365m, or 32%.

Pharmaceutical and chemical exports are notoriously volatile and can make a significant difference to the overall goods export figures in any individual months.

The sector accounts for over half of the value of all goods exports from Ireland. Pharmaceutical firms based in the country have been grappling with the impact of what is known as the "patent cliff".

The patent cliff refers to the number of top-selling drugs for which patent protection has expired, paving the way for other manufacturers to produce low-cost, generic versions of the drugs.

Over the past 12 months Pfizer, one of Ireland's leading exporters, has seen revenues for its cholesterol treatment Lipitor fall as its patent expired. The active ingredient for Lipitor is manufactured in Cork.

The fall in exports in January meant the trade surplus, the gap between the value of exports and imports, also shrank slightly. The January surplus was €2.9 billion compared to €3.2 billion last year.

Keywords: goods exports