Taking advantage of post-Brexit opportunities
Certain sectors such as construction, financial services and technology could make significant gains
British prime minister Theresa May has pledged government support to developing the regions, which will benefit Irish construction companies.
With more than €1.2 billion of goods and services traded between Ireland and the UK every week, there is a justifiable fear of trade exposures within certain sectors in light of the UK’s decision to leave the European Union. However, plenty of opportunities will also arise from this.
One sector that could make gains is the construction products and services industry. UK and Northern Europe director of Enterprise Ireland Marina Donohoe says the Northern Powerhouse offers opportunities.
“The Northern Powerhouse is a government strategy towards rebalancing economic wealth in the UK and it’s around building infrastructure in Manchester, Birmingham, Liverpool and Newcastle. There are many of our client companies that are working on public projects and commercial projects in those locations and there are a couple of initiatives we are working on to try and encourage that activity,” she says.
Donohoe recently attended the Confederation of British Industry annual conference, at which both Labour leader Jeremy Corbyn and prime minister Theresa May spoke. She says both reiterated government commitment towards developing the regions and investing more in Northern Powerhouse.
She says these regions will be given more autonomy and control in terms of spends in those regions, so construction work in these areas look set to continue and grow.
Financial services and technology is an area of significant opportunity post-Brexit, according to Donohoe.
“The UK and London in particular has built itself up as a hub globally in that particular area and the opportunity for our client companies to further that is significant. We held an event recently at the embassy in London with 19 client companies and a guest list of over 90 senior decision-makers in that sector, with a view to improve the relationships between the UK and Ireland in this area,” she says.
On a regional basis, Enterprise Ireland has also partnered with the Irish Business Network Scotland.
“This is part of an initiative to develop links between financial services and the tech industry in Scotland, back into Ireland, and it’s worth noting that last year, while overall exports from the UK by Irish companies grew by 2 per cent, in Scotland it grew by 12 per cent. They’re winning business and getting projects up there and there’s an absolute openness to do business with Irish companies.”
A number of sector-specific trade missions, including with the cleantech industry, have taken place in Scotland. “When you look at the renewable energy targets that Scotland has set and the investment they are making in wind and water technologies, there’s a good alignment between what Ireland is offering and what Scotland is looking for,” Donohue says.
Dr Kevin Hanrahan of the Rural Economy Development Programme at Teagasc says the dependence of the Irish food industry on the UK market is “no secret”. The beef industry is most exposed; more than half the volume of beef exports go to the UK.
“There’s not another market that’s going to take that volume of product in the short term. The industry is dominated by only a handful of big companies like Kepak and ABP. They are exposed but they’ve also got businesses in the UK so they have a capacity to mitigate some of their exposure at a company level.”
He says it’s hard to find “bright sparks” in terms of good news stories in the food industry.
“The principal ones that might emerge involve opportunities for indigenous companies to potentially replace UK-sourced products in the event of a Brexit that’s not very favourable to trade,” he says.
However, he says the hurdles a small food company must overcome to get their product to shelf in stores like Tesco or SuperValu are quite high in terms of ISO levels of manufacturing, so a lot of investment will be needed in that space.