Report reveals extent of North’s dependence on trade with the Republic

The extent of Northern Ireland’s dependence on trade with the Republic has been revealed in new figures from the Northern Ireland Statistics and Research Agency and Department of Finance.

In 2016, 30 per cent of Northern Ireland’s exports – £2 billion (€2.3 billion) – were sent to the Republic; a much greater percentage than the goods going the other way. Just 1 per cent of the Republic’s exports, worth £1 billion, went to Northern Ireland.

However, England, Scotland and Wales remains Northern Ireland’s single largest primary market for external sales, even though the Republic is its largest export market.

Northern Ireland exported almost twice as much to the Republic as it imported, with businesses making 758,000 cross-Border deliveries southwards in 2016, compared with 410,000 deliveries from the Republic.

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Northern Irish exports to the Republic are dominated by food and live animals, machinery and transport equipment, and manufactured goods. Nearly three-quarters – 74 per cent – come from small businesses.

Businesses located along the Border are more likely to be involved in cross-Border trade than those situated further away, according to the report’s authors whose work has shed greater light on the trade taking place.

However, the study so far offers only a “partial picture”, as Northern Ireland businesses rely heavily on moving and receiving goods through ports in the Republic for its trade with Great Britain.

“North-South supply chains cannot be considered in isolation from trade with Great Britain and this remains an area for further research,” the Northern Ireland Statistics and Research Agency report said.

Catastrophic impact

The figures have come as no surprise to businesses on the Border, for whom the report underlines the potentially catastrophic impact of Brexit on Northern Ireland's economy.

Most cross-Border trade is carried out by small and medium-sized businesses, which could be jeopardised by customs and origin certification rules, according to Stephen Kelly, chief executive of Manufacturing NI.

“With 750,000 business transactions from business to business from North to South, if Northern Ireland is outside the EU, we run the risk of needing origin certificates for all those trade transactions.

“That could potentially add hundreds of thousands of pounds of costs onto the manufacturing sector, particularly for smaller firms, which could potentially create a crisis in the manufacturing sector in Northern Ireland.

“While there would be the same implication for goods going in the opposite direction, obviously the impact wouldn’t be as severe,” he said.

The official statistics highlighted the threat posed by Brexit to Northern Ireland, said Gavin Killeen, managing director of Derry-based company Nuprint, which supplies labels and packaging for food and drink companies across the island.

“The Republic is one of the most economically advanced economies in Europe, whereas the Northern Ireland economy has been stagnant for a number of years.

“If you were an ambitious company which wanted to grow and to create, you traded with the Republic. The reality is the economy in the Republic will be well able to continue even if there is a hard border.

“Whereas in Northern Ireland, which already hasn’t got much going for it economically – a stagnant economy which isn’t growing, and no government – any hard border has the potential for a significant impact,” he said.