Strange but true. Ireland is one of the biggest exporters worldwide of Coca Cola essence. The syrup, which is in pellet form, is exported to Coca Cola bottlers worldwide. According to Irish Exporter's Association chief executive, Mr John Whelan, more than £1 billion (#1.27 billion) worth of the essence is sent abroad each year.

This essence falls into the chemicals and related products category, which accounted for nearly £16 billion of Irish exports between January and September 2000, according to the latest figures from the Central Statistics Office. Exports of organic chemicals increased by 53 per cent to £10 billion for January to September 2000 compared to the same nine-month period in 1999.

The figures are further evidence of the very strong growth in exports, showing a total of £47.4 billion - up 25 per cent on the same period last year.

"We forecast now that the full year's exports for 2000 would be £63.2 billion, that's up from £52.1 billion for the year 1999," says Mr Whelan. This indicates an annual growth rate of 21 per cent, a significantly faster growth rate than 1999's 15 per cent.

There is no doubt that exports are intrinsic to the Irish economy, considering that the State's merchandise trade surplus of £17.7 billion in 1999 accounted for more than 26 per cent of GDP that year, a figure unparalleled in the industrialised world. According to the Forfas International Trade and Investment Report 2000, Ireland exported £13,909 worth of goods per capita, three times the EU average of £4,360 and higher than any other EU country. This figure was only exceeded globally by Hong Kong and Singapore.

Despite an emphasis on the computer software sector, the main gains, Mr Whelan insists, are coming from the organic chemicals/pharmaceuticals sector in terms of added value contribution. In the January to September 2000 timeframe exports of organic chemicals were £10 billion; imports were £1 billion. We exported £10.8 billion of computer software/equipment, but imported about £6 billion.

However rosy the outlook may seem based on the CSO figures, export orders have been weakening over the last few months, according to the export orders index, a component of the latest NCB purchasing manager's index, a qualitative monthly survey.

"Orders are still growing but at a substantially lower pace than the beginning of last year," says Mr Dermot O'Brien, chief economist at NCB. It will be some time until that percolates through to the trade figures. He explains that on the basis of the most recent information exporting activity remains very buoyant.

Because the export orders index measures orders as opposed to the deliveries used for measuring conventional trade statistics, "it should be a lead indicator suggesting that the actual export figures or growth in exports will be slower in the period ahead".

A factor which may very well affect Ireland's exports is that Ireland is unique amongst the 12 EU countries participating in monetary union in that its two largest trading partners, Britain and the US, are outside the euro-zone. This, according to the Forfas report, leaves the Irish economy more vulnerable than other euro participants to fluctuations in the external value of the euro, particularly against sterling and the dollar. As the euro strengthens against the US dollar, says Mr Whelan, "then the apparent productivity of Irish workers and output from Irish plants goes down, so a lot of the multinationals may opt to either transfer back to the US or to another lower cost producing point internationally".

The rate of growth in the US is more important than the exchange rate, says Mr O'Brien.

Last December the Forfas report indicated that the US was emerging as Ireland's largest export market. "The US market has been our fastest growing one in the last three years, whereas in 1997 we were exporting £3.9 billion to the US. In the period January to September we've already exported £9.3 billion and that's likely to annualise out now to £12.4 billion. So it's a 400 per cent growth since 1997 and that's taking it right up to the same level of exports as we have to the UK," says Mr Whelan.