Ireland appeared to defy the global downturn in the tech last year, exporting a record €340 billion worth of services, the majority of which were “computer services”. The headline figure was up by more than €40 billion on the previous year.
Central Statistics Office (CSO) figures show computer services exports – at €195.7 billion – accounted for 58 per cent of the State’s total services trade last year.
A string of big names, including some of Silicon Valley’s most powerful entities, announced lay-offs or hiring freezes last year in response to the souring economic climate and an overexpansion during the pandemic period.
Facebook owner Meta and X (formerly Twitter) were among the big names here to announce job losses.
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The figures appear to underscore the latest corporation tax figures, which show the Government netted a record €6.3 billion from the business tax in November despite a host of predictions that 2023 would see a big reversal in receipts.
The strong performance was linked to better-than-expected earnings in the tech sector with Meta, Google and Intel, which are among the biggest taxpayers here, posting stronger earnings estimates for the year as a whole.
“Total other business services” which includes aircraft leasing was the second-largest component of the State’s services export trade, amounting to just under €64 billion last year.
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Despite the strong export numbers, Ireland recorded a trade in services deficit of €0.2 billion in 2022, down from a surplus of €5.4 billion in 2021.
“This deficit was mainly due to an increase in royalty imports of €22.8 billion from Europe and the US which were significantly offset by increased computer service exports,” the CSO’s Annette Hayes said.
“The United States, the UK, Germany and the Netherlands remained Ireland’s most significant trading partners,” she said.
Overall the CSO figures show services exports to Europe rose by €17.5 billion to €169.9 billion mainly due to increased computer services exports while exports to Asia grew by €10.9 billion to €73.5 billion due to increased computer and business services exports. Exports to the US grew by €1.3 billion to €42.4 billion in 2022.
The Irish economy fell into a technical recession in the third quarter as gross domestic product (GDP) contracted by 1.9 per cent. Several agencies, including the European Commission and the OECD, are predicting the economy will contract this year (in GDP terms) on the back of weaker goods exports from the pharma sector and lower levels of investment.
The domestic economy as measured by modified domestic demand was flat in the third quarter, according to the CSO.
Higher interest rates designed to fight inflation have made it more expensive for households and businesses to borrow, invest and spend. The impact of these additional borrowing costs on consumer spending and investment is expected to dictate macroeconomic outlook in the coming quarters.
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