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11 May 2015

Export Review: Q1 2015

Posted By: AIB Business

The Euro area finally turned a corner and jump started exports in the first quarter of 2015, writes John Whelan, Export Sector specialist at AIB.

This year has started well for Irish exporters, with both goods and services exports registering very strong growth. Much of the buoyancy has come from the euro area, with demand for Irish exports up by 7% in Q1 over the same quarter last year. The ECB has recently increased its growth forecast for the region, and seemed pleased with the impact of the quantitative easing (QE) programme of €60 billion monthly asset purchasing. The resultant — and expected — weakening of the euro, combined with the effect of the dramatic 45% drop in oil prices over the past 12 months, has led to a surge in exports from the Eurozone, including Ireland.

The US was exhibiting solid economic growth last year, and this has continued into 2015. The quarter to quarter 21% fall in the value of the euro against the dollar gave a very competitive edge to our exports to the US, which increased by 13% in the January to March period. This was more than double the average growth in exports achieved last year.

There was good news elsewhere too, with the Bank of England conveying an improved economic forecast for the UK. Again the QE programme underpinned the lowering in value of the euro against Sterling and, for the first time in three years, gave a boost to Irish exports to the market, which grew by 2% in Q1. This is not very world-shaking but, following three years of falling exports to the UK, the small growth is a very welcome sign that our biggest market outside the US has finally shown signs of full recovery.

Q1 2015 Exports


€ Million





Diff €











 +8.0 %


 43, 685



 +9.8 %

Source: JFW Export Analyst and CSO

Events in Greece and the Ukraine did cause some concern in the quarter but, once a ceasefire was agreed in the Ukraine and the New Greek party Syriza showed a willingness to govern within acceptable credit limits, these concerns receded. However, the collateral damage in trade with Russia did not escape and Irish exports collapsed by 48% in the quarter.

There is strong evidence of a "two track world” taking shape, with the developed world powering ahead and the developing/emerging economies deteriorating. China hit the headlines in January after the authorities cut the country’s forecast for 2015 from 7.5% to 7.0 % GDP growth – its weakest in 25 years. India also witnessed a slowing of economic growth of 7.5% in the final quarter of 2014, a decrease from 8.2% in the previous quarter.


Exports  in €Millions


















China (incl.HK)




South Africa








In Brazil the economy continues to contract and inflation rose to 7.7% in February. In South Africa the economy slowed to GDP growth of 1.5% at the end of 2014 and is not expected to exceed this in 2015.

The impact of these economic changes was evident in the poor performance of Irish exports to the BRICS region, with exports falling by 25% compared to the same quarter in the prior year (see above table). Fortunately, the BRICS countries only account for approximately 5% of total Irish Exports, and hence a decline in exports to these countries, while worrying in the longer term, will not materially affect the current year forecast.


Exceeding Expectations Prompt a Revised Export Forecast

Since the start of 2015, each economic statistic has exceeded expectations. The government’s Spring Statement was upbeat, as were the global forecasts from IMF, World Trade Organization and OECD. These improving forecasts have been reflected in a strong performance on the ground by Ireland’s exporters, as seen in the Q1 figures.

Enterprise Ireland — whose client companies accounted for €18.5 billion of exports last year — recently released a 10% export growth rate forecast for the indigenous sector for 2015, despite the 2% contraction in Q1 of exports from the agri-food sector  – the largest indigenous sector.

However, on balance the export growth forecast given at the start of the year is now due an upgrade from 6.6% growth to a forecast 9% growth for the year 2015, taking all sector (multinational and indigenous) exports up to a forecast sales turnover of €207 billion in the year.

If you require finance to expand into new markets, talk to AIB today

See also:

Outlook: Exports
AIB’s Outlook: Exports report – in association with Bord Bia and the Irish Exporters Association (IEA) – provides detailed research, analysis and commentary, on a multi-sectoral basis, of the SMEs that are currently exporting goods or services from Ireland. An important part of this report is the specially commissioned detailed research on exporting SMEs, which has been carried out independently by Ipsos MRBI on behalf of AIB.


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