The falling value of the dollar against the euro contributed to a sharp decline in the value of Irish merchandise exports to the US last year, an exporters' group said.

In a review of business conditions in 2007 that contrasted low export growth overall with record levels of trade on global markets, the Irish Exporters' Association (IEA) said more had to be done to reduce manufacturing costs in the Republic and to improve supply chain infrastructure. Service exports grew by 18 per cent to €64.8 billion, a sum that represents 42 per cent of all exports last year. Merchandise exports were worth €89.3 billion in 2007, less than 1 per cent stronger on an annual basis after a big dip in the second half of the year.

"The main market loss was in the US where the dollar's depreciation against the euro took its toll on Irish exporters. In 2007, Irish exports to the US fell by 7 per cent, a loss of €1.1 billion, to close off at €15.1 billion," the review said.

Computer hardware exports fell 9 per cent to €17.3 billion.