Exporters in ‘position of strength’ to face dual threat of Covid-19 and Brexit

Enterprise Ireland-backed companies reported record sales last year of €25.6bn

Enterprise Ireland chief executive Julie Sinnamon

Enterprise Ireland chief executive Julie Sinnamon

 

Irish exporters recorded a record sales in 2019 but the dual threat of Covid-19 and Brexit represents “critical challenges” for them this year, according to Enterprise Ireland.

New figures published on Thursday show exports from client companies rose 8 per cent in 2019 to €25.6 billion. But with the coronavirus pandemic affecting market confidence and supply chains, a sharp decline in sales is expected in 2020.

Overall, some 1,000 client companies have been impacted by Covid-19 with about 300 of these are also vulnerable to Brexit due to continued high levels of exports with Britain.

Exports to Britain rose 2 per cent in 2019 to €7.9 billion, meaning it is still the largest international market for Irish businesses.

The state agency, which has responsibility for helping Irish companies win business in international markets, had been targeting exports of €26 billion this year before the coronavirus pandemic hit.

Chief executive Julie Sinnamon on one of her last media outings ahead of stepping down from the role later this year, said 2020 will be one of the most challenging ever for exporters. However she added that Irish companies are at least facing the dual threat of Covid-19 and Brexit from a position of strength.

“All t he work we’ve done over the past few years in terms of helping companies become more competitive by innovating and diversifying, is more helpful now than it ever was,” she told The Irish Times.

“We’ve seen really strong growth outside of the UK and across all sectors so if you ever had to face the perfect storm of Covid-19 and Brexit, at least Irish enterprises came into this year in a stronger, more resilient position than would have been the case,” Ms Sinnamon added.

New contracts

Some 221,895 people work at businesses supported by Enterprise Ireland. Exports from client companies increased by €12.7 billion between 2009 and 2019. But new contracts won in the first six months of this year are down 12 per cent.

Client companies reported their highest ever sales to the euro zone and North America in 2019. Exports jumped 15 per cent to €5.6 billion for the euro zone and by 16 per cent to €4.7 billion for North America. Sales to Asia Pacific also rose, increasing 6 per cent to €2.1 billion.

Ms Sinnamon said that steps taken by Enterprise Ireland to consider other markets outside of Britain had paid dividends.

“Over the last few years we’ve been saying we need to change our global footprint and lessen our dependence on the UK. We have done a lot of work in terms of encouraging exports to the euro zone in particular and the result is 15 per cent growth in 2019 so that has validated what we have been doing with companies,” she said.

“Brexit is still coming down the line at a rate of knots, but the fact we’re down to 31 per cent of sales from the UK, compared to 42 per cent ten years ago gives us a much better balance,”

Ms Sinnamon added that the acceleration of Irish companies online as a result of the Covid-19 crisis would stand to them. She also took heart from an increase in the number of female-founded businesses, which has risen from 7 per cent in 2012 to over 20 per cent currently.

“The area where we’ve made some progress but still have more to do is in the area of innovation. Getting companies to invest in R&D and to work collaboratively is key,” she said.