Exports of medical and pharmaceutical products declined 26 per cent or €579 million in May, according to new figures from the Central Statistics Office.
Preliminary figures for May indicate a 4 per cent (€314 million) decrease in seasonally adjusted exports and a 2 per cent (€69 million) decrease in seasonally adjusted imports resulting in a 7 per cent decrease in the trade surplus.
The main drivers behind the decrease were the 26 per cent decline in exports of medical and pharmaceutical products, and a 72 per cent (€132 million) drop in exports of petroleum products and related materials.
Best performing
Comparing May 2013 with May 2012, the value of exports decreased by 6 per cent (€448 million) to €7.1 billion. Food and live exports, a largely indigenous industry, was the best performing export category, rising by 7 per cent in the year to date.
The value of imports decreased by 4 per cent (€159 million) or to €3.9 billion. The largest decrease in imports was the import of other transport equipment (including aircraft) which declined by €274 million or 93 per cent.
The EU accounted for €4.04 billion (56 per cent) of total exports in May, while the US was the main non-EU destination, accounting for 19 per cent or €1.3 billion of total exports.
Expiration of patents
Stockbroker Goodbody attributed the decline in the value of pharmaceutical exports to the expiration of patents on a number of blockbuster drugs manufactured by high-profile companies in Ireland.
It said the announcement by US drug manufacturer Pfizer that it will invest more than €100 million in upgrading two of its Irish plants to accommodate work on new drugs was encouraging.
However as these drugs will take some time to come on stream it warned that “pharmaceuticals will continue to weigh on Irish goods exports for some time”.
Stockbroker Merrion said that while the export sector will remain the key growth engine of the Irish economy for some time to come, there were, "clear downside risks in the short term, especially in relation to external demand".
It said the sustainability of the positive contribution from the chemicals sector was a cause for concern.
