Exports and imports

18 Nov 2019

Irish Economy: Goods exports +10% YTD

Goods exports in September of €12.7m (seasonally-adjusted) were in line with the average monthly total YTD. 

However, owing to very strong export growth so far this year, September’s total was higher than all but one month of last year and 8% higher than the average monthly total in 2018. Indeed, total goods exports of €114bn in the first three quarters of the year are 10% higher than the same period of last year. Although the y/y growth has been quite broad based, it has been concentrated in the four largest commodity groups by value – Chemical and Related products (+9%), Machinery and Transport Equipment (+25%), Miscellaneous (+5%) and Food/Animals (+5%). Goods exports to Britain are modestly lower YTD (-3%) with this slight weakness evident across a range of commodities. Goods exports to the rest of the EU are +5% YTD and exports to the USA are +20% YTD, although almost all of this growth is coming from the high-value pharma sector.

September was a low month for goods imports. €6.7bn of imports (seasonally-adjusted) in the month was the lowest monthly total since May of last year. Imports are actually 3% lower YTD (the pharma sector is again chiefly responsible) and the trade surplus has expanded by one-third to €49bn as a result.

It is encouraging to see the Irish export sector continue to post strong numbers given concerns about slowing growth momentum in the global economy and weaker PMI readings from the manufacturing sector in recent months.

Dalata: Acquires hotel in Cambridge

Dalata announced on Friday afternoon that it had completed contracts to acquire the operating and leasehold interest in the 4-star Tamburlaine Hotel, in Cambridge, one of the group’s target cities.

The Tamburlaine Hotel was built in 2017, has 155 bedrooms and ancillary facilities and will be rebranded as Clayton Hotel Cambridge in due course. It is located adjacent to the city’s train station in the city’s CBD. In keeping with the typical operating structure of its UK expansion strategy, Dalata will operate the hotel under a new lease for a 30-year term (with index linked five-year rent reviews) from The Ability Group, which has acquired the property. This acquisition brings to nine the number of Clayton-branded hotels in the UK. 

Dalata has typically undertaken new-build projects in the UK in order to gain modern properties in city centre locations. Although this acquisition will not be a Dalata-designed and built hotel, it fits well with this strategy without the lead time.

UK this week

Five new polls have been released over the weekend which indicate that the Conservatives have extended their lead over Labour. Of these, YouGov gives the Tories the most sizable lead of 17 points whereas BMG points to the smallest (but still clear) eight point lead, with the remaining three towards the upper end of that range. These polls follow the decision by the Brexit Party not to contest the 317 seats won by the Conservatives in the 2017 general election and should underpin expectations that the party is on course to secure a majority in next month's General Election. An ITV debate between Boris Johnson and Jeremy Corbyn is scheduled for Tuesday and with a BBC Question Time debate involving a wider cast list of leaders taking place on Friday evening. 

In other things to watch for next week, we may also see the release of the Labour Party manifesto. Sterling has been lifted by news that looks to bolster the prospect of a Conservative majority, with this outcome seen as raising the chance of PM Boris Johnson getting his Brexit deal through Parliament and thereby reducing the chance of ‘no-deal’ on 31 January, the new Brexit deadline.

Europe & ROTW this week

For Eurozone investors, the account of the ECB’s October meeting, due on Thursday, should indicate the extent of opposition new ECB President Christine Lagarde will face if she seeks a further cut to the Deposit rate in December. Ms Lagarde is also set to speak the day after the account is released. The top-tier numbers for the coming week will come in the shape of the preliminary Eurozone Composite PMI due on Friday. 

From China, following the announced 5bp cut in the Medium Term Lending Facility (MLF) rate (to 3.25%) on 5 November, we expect the Loan Prime rate to be lowered next week. That rate stands at 4.20%, with a lowering in this set to transmit the reduction in the MLF rate into private sector borrowing costs.

US this week

Over the week ahead, there is nothing in the scheduled calendar that implies we will receive major news on the trade war front, though that does not necessarily mean radio silence. Indeed, China continues to seek a roll-back of some of the tariffs applied since the dispute began, whilst the US has its own asks, including the purchase of more US agricultural produce. Any sign of a shift in behind the scenes talks on these issues would help to lift hopes of a deal and with it risk sentiment in markets. 

Data wise, we will get the release of the previous Fed meeting minutes on Wednesday evening and then on Thursday we get the Philadelphia Fed survey along with a flurry of US housing sector releases.


Economic Releases


Nothing of note.