Export Competitiveness Is Under Threat As Currency Exchange Rate and Fuel Price Increments Increase Cost Base For Irish Businesses, stated the Irish Exporters Association PDF Print E-mail

Wednesday, 13th April 2011 (Source: IEA Press Release)

John Whelan, CEO of the Irish Exporters Association, responding to the release of information from the IMF of the downward revision in Irish GDP growth for this year stated; ''Export businesses are also facing significant difficulties on international markets and are unlikely to contribute as strongly to Irish economic growth as originally forecast.

The IEA advised that the global trade scene has changed since the beginning of the year; Internationally demand has weakened under the weight of the continued fuel price escalation since this time last year. But also the political turmoil in North Africa and in the Gulf states is taking it toll on trade. And we are having to deal with a the slowdown in trade with Asia due to the Japanese earthquake and associated nuclear plant damage.

John Whelan went on to say; ‘’In addition to the demand side weakening, the cost competitiveness of our exports are also being eroded by fuel price escalation and unfavorable currency movements’’ The IEA advised that; “The barrel of crude oil has risen by 18% since this time last year - with most of the increase arising since the turn of the year. This has filtered it way into transport cost, packaging cost and production process running costs.

Irish export price competitiveness has also been affected by the return to weakness in the £ sterling which has fallen by 3% since January against the euro , and in tandem there has been a weakening in the US dollar which has fallen in value by 8 % since the turn of the year. John Whelan further stated; ‘’The hangover from the financial crisis is still with us globally, not just in Ireland.

High unemployment in most of our major markets and sharp belt-tightening by governments to bolster their Exchequer earnings is dragging down consumer and private sector demand for exports”. The IEA advised; “The latest forecast from the World Trade Organisation released earlier in the month, took into account the impact of rising fuel prices, political unrest and the Japanese disaster, and predicted a slow down in world trade growth to 6.5% this year compared to 14.5% for 2010.”

John Whelan, concluded by saying; ‘’In these circumstances there is an urgent need for the new Government to roll out the promised initiatives outlined in their programme for government , but also we need some innovative new solutions to counter these unexpected developments.’’