New EI chief says diversifying exports is top priority, to ‘better deal with shocks’ in the future.
Irish companies are expecting to grow exports by 8pc this year, after the sale of goods and services abroad flatlined in 2020, according to Enterprise Ireland’s (EI) 2021 Outlook.
New EI chief executive Leo Clancy said achieving that result “will depend significantly on how the pandemic develops”, but he said he was encouraged by reports from EI-backed companies that new contracts were up 14pc at the end of Q1.
“As economies around the global rebound and open, our client companies are forecasting a return to growth and we will also be supporting them through the full reopening of our overseas office network, trade mission programme and in-market supports,” he said.
“We take nothing for granted however, and need to acknowledge that the second half of 2021 will continue to be challenging.”
Companies supported by EI achieved a marginal increase in exports in 2020 of 0.3pc to nearly €25.5bn, despite the twin challenges of Covid and Brexit.
The UK is still the biggest market for exporters, accounting for €7.5bn or 29pc of sales. Nonetheless, Brexit put a 3.8pc decline in the annual number.
While UK exports were €2bn higher than the amount from a decade ago, the share of exports going to the UK has fallen from 40pc in that time.
By contrast, exports to the rest of the Eurozone doubled in the same time period to €5.85bn, making it the second-largest market for EI-backed exporters.
In sectoral terms, digital and life sciences companies had difficult years, registering export declines of 5pc and 2.8pc, respectively.
Mr Clancy said digital services exports were hit hard by the challenges facing the travel technology industry. Stripping out travel tech, digital firms increased exports by 12pc, he said.
“They are performing well and will rebound strongly – that’s the benefit of having a good underlying development platform,” he said.
Construction, fintech and food all experienced export growth in 2020, with construction booking a 12pc year-on-year increase.
Mr Clancy said diversifying exports both geographically and sectorally was a top priority for 2021, to “better deal with shocks” in the future.
Mr Clancy said EI trade missions were set to resume once international travel reopens after the summer.
Tánaiste Leo Varadkar confirmed that a trade mission to the US has been provisionally booked for September, with stops in Washington DC, San Francisco and Seattle.
“There is a general expectation among Enterprise Ireland companies that export growth will return to pre-pandemic levels in 2021,” Mr Varadkar said.
“This positivity also extends to the important UK market where, despite the logistical challenges many companies have overcome, businesses are planning to increase exports there.”
Mr Clancy added that building a new trading relationship with the UK was a key objective in the coming years, but that the prospect of the UK instituting customs checks on incoming goods from the EU was a “big concern”.
Enterprise Ireland provided €198m in financial support to companies last year via series of grants for financial planning, online retail and business support. More than 8,600 businesses made use of its advisory services during the year.