Tuesday 25 October 2016

Thousands of jobs threatened by the 'perfect storm' created after Brexit vote

Published 12/09/2016 | 02:30

British tourists in Ireland spent 12% less this summer because of the drop in the value of sterling against the euro. Photo: Niall Carson/PA Wire
British tourists in Ireland spent 12% less this summer because of the drop in the value of sterling against the euro. Photo: Niall Carson/PA Wire

The hospitality industry in the Border counties saw trade from Northern Ireland plummet by up to a fifth over the summer because of the Brexit-effect on sterling.

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And spending from British tourists fell by 12pc on average, with the weakening in the pound versus the euro cited as the big factor, according to the study by the Restaurants Association of Ireland and the Vintners Federation of Ireland.

Worried: Adrian Cummins. Photo: Tom Burke
Worried: Adrian Cummins. Photo: Tom Burke

It comes as Ibec warned that Irish food exports into the eurozone could be dented as a result of the vote in the UK on June 23. Adrian Cummins, Restaurants Association of Ireland chief executive, said the combination of high excise and uncertainty over Brexit had caused the 'perfect storm' for the sector.

"In our recent poll, our members told us that they are already feeling the pressure, as they report an average 12pc downturn for British tourists spend for July and August compared to the same time in 2015 with the effects of sterling exchange being cited as a factor," Mr Cummins said.

"It is more worrying, however, when we talk to our members in the Border counties who are seeing a drop of up to 20pc on cross-Border spend in July/August compared to this time last year."

Sterling has weakened from around 69 pence to the euro last November, to around 84 pence now. The pound weakened dramatically in the wake of the referendum vote on June 23.

Read more: Things go from bad to worse for Ireland as a 'hard' Brexit looms over the horizon

A weaker pound is bad news for Irish exporters, as it means their products are more expensive for UK buyers. But it also has the potential to dent the business of firms in Border counties, as it makes it dearer for shoppers north of the Border to come south.

It comes as business lobby group Ibec warned of a substantial threat to thousands of jobs if the Government failed to respond decisively to intense competitive pressures that have followed the referendum result.Its own report today reiterates that a further weakening in sterling could see losses in Irish food exports hit €700m. It could also result in 7,500 jobs being lost.

It called for a review of the national agri-food strategy FoodWise 2025; budget tax reform to improve Ireland's competitive position and the reintroduction of the Employment Subsidy Scheme.

The organisation's food and drink industry director Paul Kelly said: "A failure to act will compound the pressure on exporters, undermine Ireland's long-term position in the market and threaten jobs."

Irish Independent

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