Economics: Ireland’s external trade balance likely to have picked up in July

The domestic economic focus on Friday turns to the external trade figures for July and planning permissions for the second quarter, which will both be released by the Central Statistics Office later this morning.

There was a fall in the seasonally-adjusted surplus in June to €4,054m, from the revised surplus of €5,222m (€5,226m) posted in May. Seasonally-adjusted exports were up 0.8% in the month at €11,811m, while imports recorded a strong increase of 19.5% to €7,757m.

Meanwhile, on an unadjusted basis there was a surplus of €4,989m in June, €1,450m above the surplus of €3,539m posted in the sixth month of 2017. The cumulative surplus in the first half of 2018 amounted to €28,031m, €5,204m above the surplus of €22,827m in the same period last year.

In terms of the outlook for exports for 2018 as a whole, available external demand indicators point to sustained growth in the near-term. At this juncture, weighted trading partner demand for both 2018 and 2019 remains solid. Furthermore, the new export orders sub-index of the Manufacturing PMI exceeded long-run averages during the second quarter of 2018. However, while external demand growth seems set to remain robust in the near-term, the implementation of higher trade tariffs and the possibility of more protectionist measures represent a key risk to the overall prospects for the export sector going forward. On top of that, there now appears to be an increasing chance of a “hard Brexit”. Therefore, the balance of risks for external trade remain tilted to the downside.

While there are a lot of uncertainties regarding the outlook, we are still anticipating another strong performance this year, with a record surplus of around €48bn forecast, up from €43.5bn in 2017. Overall export volume growth of 5.5% is projected for 2018 as against 7.8% last year.

Meanwhile, a seasonally-adjusted surplus of €4,400m is expected for July.

Economics: Ireland’s planning permissions forecast to show robust year-on-year growth in the second quarter

In the first quarter of 2018, planning permissions were granted for 8,405 dwelling units, compared with 4,650 units for the same period in 2017, an increase of 80.8%. The quarter saw the first permissions granted by An Bord Pleanála through Strategic Housing Development Applications, which accounted for 62% of the quarterly increase in dwelling units.

Planning permissions were granted for 5,917 houses in the first quarter of 2018 and 3,754 in the first quarter of 2017, an increase of 57.6%. Planning permissions were granted for 2,488 apartment units, compared with 896 units for the same period in 2017, an increase of 177.7%.

One-off houses accounted for 16.5% of all new dwelling units granted planning permission in the opening quarter. The total number of planning permissions granted for all developments was 6,036. This compared with 5,959 in the first quarter of 2017, an increase of 1.3%.

Another substantial year-on-year rise in planning permission for dwelling units is envisaged for the second quarter, with an increase of around 75% on the cards.

Alan McQuaid (14/9/18)
Economist