The slowdown in consumer spending over recent months has resulted in the value of imports in October falling 17 per cent fall compared to the same month last year.
Detailed external trade data from the Centrals Statistics Office (CSO) show imports of road vehicles are down 19 per cent over the first nine months of the year and by almost 50 per cent when September is compared with the same month in 2007.
On a more positive note the sharp decline in the price of oil since its peak at $147 in July has seen the cost of energy imports fall to €396 million, lower than the same month last year with further falls expected next year.
Ronnie O'Toole, chief economist with National Irish Bank, said the correction taking place in the domestic economy should see an improvement in the balance of trade as imports are falling more quickly than exports. In October the seasonally adjusted trade surplus stood at €2.9 billion.
In value terms Irish merchandise exports increased by 2 per cent in October in value terms to €7.3 billion while imports fell 3 per cent to €4.38 billion.
Mr O'Toole notes that exports are proving relatively resilient and may be evidence that the sector is "more competitive than is often portrayed".
Exports of food and beverages to the UK were 3 per cent lower in September compared with a year earlier, part due to the weakening sterling which makes Irish exports less attractive.
He said the gradual move by the computer manufacturing sector out of the State to Asia and Eastern Europe has seen the pharmaceutical sector emerge as the most important export product category, accounting for more than half of all goods exports.
Exports to the UK in October, which were largely in line with the same month last year, reflected the performance of the chemical and pharmaceutical sectors, he added.
One of the sharpest declines in goods imports in October was in the components sector for the computer manufacturing industry, which dropped to €534 million this September, compared with almost €800 million in the same month in 2007.
Mr O'Toole suggests this decline may reflect a slowing of activity at Dell. Exports from this sector were also lower, slipping from €1.15 billion in September 2007 to €782 million a year later.
Alan McQuaid, economist with Bloxham stockbrokers, said because of the openness of the Irish economy it was more vulnerable than most to a decline in world trade demand.
He noted that sterling could slide towards parity with the euro in the short-term.
"At this juncture it looks like 2009 will be the most difficult year for Irish exporters for some time, though the overall net trade performance will again be helped by weaker imports due to falling consumer demand."
For the nine months to September exports to China grew by 22 per cent, to Poland by 30 per cent and Spain by 11 per cent.
Over the same period imports from the UK were 5 per cent lower while the value of goods and services brought in from China was 17 per cent down.
