Tuesday 25 April 2017

Exports to Britain down by €496m due to Brexit

Exporting businesses have been hit hard by the slump in the value of the pound in the wake of the Brexit vote. Photo: Bloomberg
Exporting businesses have been hit hard by the slump in the value of the pound in the wake of the Brexit vote. Photo: Bloomberg
Colm Kelpie

Colm Kelpie

Irish goods exports reached a record last year of almost €117bn, but exports to Britain dropped by almost half a billion euro as the Brexit vote took its toll.

Imports from Britain also fell back by €1.36bn.

The preliminary data from the Central Statistics Office are the first official figures showing the impact of the Brexit referendum on Ireland's crucial export sector.

Exporting businesses - particularly in the agri-food sector and those in border areas - have been hit hard by the slump in the value of the pound in the wake of last June's vote.

Sterling at one point had lost almost a fifth of its value against the euro, as it tumbled to more than 90p against the single currency, putting a particular squeeze on small and medium-sized exporters as they grappled with the currency impact.

The pound was hovering around the 86p mark to the euro yesterday.

Alan McQuaid, of Merrion Fixed Income, said that overall trade data for last year remained positive, even though business and consumer confidence had been dented to some degree - although not in a major way - by the uncertainty surrounding Brexit.

"Still, the uncertainty over the implications of Britain's decision to leave the EU suggests risks on the external trade front remain elevated for 2017 and beyond, especially for food exporters," Mr McQuaid said.

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"The movement in the euro/sterling exchange rate will be critical in this regard."

It comes as Food and Drink Industry Ireland (FDII), the lobby group affiliated to Ibec, called on Government to implement a range of policy measures to ensure that the Irish agri-food sector remains innovative, competitive and capable of meeting the challenges posed by the Brexit vote.

"Ireland's largest indigenous sector faces substantial challenges in the years ahead in a world that has changed radically in 12 months," said FDII director Paul Kelly.

"On the international front, 2016 saw the risks from Brexit beginning to crystallise for Irish food and drink exporters.

"At home, in the domestic grocery market, declining consumer sentiment has given way to a decrease in sales relative to volume growth and this is putting further pressure on business costs."

Overall, goods exports totalled €116.9bn last year, the highest annual total on record, according to the preliminary figures.

This was an increase of €4.5bn or 4pc over 2015.

Imports in 2016 decreased by €507m, or 1pc, to €69.6bn compared with 2015.

The preliminary trade surplus for 2016 was €47.3bn.

The biggest increase in exports overall was seen in exports of electrical machinery, which jumped almost 150pc to €7.3bn.

The figures

  • Goods exports to Britain – €13.3bn, down 4pc or €496m
  • Goods imports from Britain – €15.55bn, down 8pc or €1.35bn
  • Goods exports to USA – €30.2bn, up 12pc or 3.3bn
  • Goods exports to EU countries – €59.65bn, down 0.3pc or €193m

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