The Republic's foreign direct investment (FDI) outweighed investment into the State in 2004, the first time that this was the case.

During 2004, FDI outflow was €12.7 billion, two-and-a-half times the previous year's figure, according to Forfás. The figure does not include investments by Irish residents in foreign commercial and residential property.

The policy advisory board, in its 2005 International Trade and Investment Report, said inward FDI flow in 2004 was half that of 2003, while outflow was the highest ever recorded.

"As a result, Ireland was a net exporter of FDI for the first time in 2004. Given the volatility of FDI flows, it is too early to tell if this trend will continue, but it indicates that Ireland may be adopting the profile of a more typical developed economy, in that it is becoming more important as a source rather than a destination of FDI."

FDI inflow of €9.1 billion in 2004 was the lowest since 1999, and less than one-third of the record achieved in 2002.

The majority of FDI inflow in 2004 was into IFSC-related companies.

The trade surplus in 2004 was €22.1 billion, an increase of 3 per cent, with internationally traded services becoming the main source of export growth.

Merchandise exports from the Republic increased by 2.6 per cent, to €84.3 billion, after two consecutive years of decline, but were still below the peak achieved in 2001. Merchandise imports rose by 6.6 per cent, to €51 billion.

"In the rankings of the world's largest exporters, Ireland has fallen from 19th in 2002 to 23rd in 2004."

Strong growth in merchandise imports was mainly driven by consumer goods and the higher cost of fuel imports.

Foreign-owned business accounted for 87.6 per cent of total exports. "However in terms of their direct expenditure in the Irish economy, the contribution of indigenous exporters is similar to that of foreign-owned exporters.

"Foreign firms spent €17.8 billion on payroll and Irish goods and services in 2004, while Enterprise Ireland supported indigenous firms spent €16.2 billion."

While the merchandise trade surplus fell for the second consecutive year, declining by 2.8 per cent to €33.2 billion in 2004, it is still the highest per capita merchandise trade surplus in the OECD, according to the report. Prior to 2003, the Republic experienced 12 years of expending merchandise trade surpluses.

The report said that "2004 was another impressive year for Irish services exports", with the services trade deficit (€9.7 billion) falling for the second consecutive year.

Central Statistics Office figures showed a 13.7 per cent increase in Irish services exports in 2004. The World Trade Organisation estimated that Ireland had a 2.2 per cent share of the global trade in services.

"Computer services continue to dominate services exports, accounting in 2004 for 35.5 per cent of total services exports." Computer services exports have risen by 183 per cent since 1999.

"The continued success of the Irish Financial Services Centre (IFSC) and its importance to the economy is emphasised by the net trade surplus of €4.9 billion in IFSC activities in 2004. The growth in IFSC exports, comprising mainly insurance, financial services and business services exports, has been 234 per cent since 1999."

The bulk of the services imports bill was accounted for by business services, at €21.3 billion or 41 per cent of the total. The second-largest contributor to services imports were royalties and licences, at €14.8 billion.

"The growth rate in royalty imports, which are primarily derived from industrial production, has decelerated in line with the slowdown in industrial production."