The Republic is now responsible for more than 50 per cent of Northern Ireland’s exports, according to a new study which highlights the increase in cross-Border trade since Brexit.
The research by the Economic and Social Research Institute (ESRI) examined detailed Northen Ireland trade data, which had not been made available before.
While sales and purchases with Britain accounted for the largest proportion of Northern Ireland’s external sales, its international trade was found to be “heavily concentrated in cross-Border trade” with the Republic.
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It reported a total of €10.5 billion in goods exports in 2021 (excluding sales to Britain which are not included as international trade) and €7.6 billion in goods imports.
The study, which was commissioned by employers’ group Ibec, found that 53 per cent of the North’s exports (worth about €5.6 billion) went to the Republic while about 35 per cent of imports (€2.6 billion) came from South of the Border. The next most important export partner for Northern Ireland was Germany, accounting for 15 per cent of total exports.
The Republic had considerably higher overall total goods imports and exports, at €99.8 billion and €160.3 billion respectively in 2021.
Northern Ireland was found to make up almost 5 per cent of the Republic’s total goods imports and just over 2 per cent of exports, which the report noted were “sizeable shares given the much smaller size of the Northern Ireland economy relative to the other top 10 partner countries”.
While detailed Northern Ireland trade data only started to be collected in 2021, limiting previous year comparisons, separate Central Statistics Office figures indicate Northern Ireland trade with the Republic rose by 71 per cent in 2021 while the Republic’s trade with the North increased by 57 per cent, reflecting the impact of Brexit.
Some British-based traders established bases in the North to facilitate trade with the Republic, while some companies in the Republic replaced imports from Britain with imports from the North.
“The goods trade between Ireland and Northern Ireland has grown substantially since Brexit,” stated the ESRI study, noting that international trade was strongly linked to “better overall economic performance, particularly in relatively smaller countries where the size of the domestic market may limit the ability of firms to achieve economies of scale”.
It found that distance and market size were key determinants of trade flows.
At a sectoral level, it said Northern Ireland and the Republic have relatively high concentrations of trade in the chemicals and pharmaceuticals sector.
Food and drink
The food and beverages sector accounts for a larger share of cross-Border trade than it does in the overall trade structure, with 24 per cent of goods going from the Republic to Northern Ireland in this sector, and 27 per cent of goods going from the North to the Republic.
“Both Ireland and Northern Ireland have policy priorities of developing international markets and supporting domestic firms to export,” said one of the report’s authors, Martina Lawless.
“Cross-Border trade can play a role as an accessible first step into broader exporting and this new data on trade patterns may help in the development of such policies,” she said.
Ibec’s director of lobbying and influence Fergal O’Brien said the study provided “businesses with invaluable insights on trade and supply chain trends in a post-Brexit context”.
