Enterprise Ireland has released its latest report on client companies, revealing an unsurprising slump in UK exports as it plans for a major EU push.
While uncertainty remains regarding the future of Ireland’s border with Northern Ireland, there is a clear prerogative for the Irish Government when it comes to its future trade within Europe.
Launching its report this morning, Enterprise Ireland revealed that 2016 proved to be a relatively successful one as the economy climbed its way out of recession, with total export sales of €21.6bn.
This marks not only a record year for exports from Ireland, but a 6pc increase on the same time in 2015.
Noting where growth was greatest for Enterprise Ireland’s client companies, the State organisation identified a 16pc increase in exports within software and internationally traded services, amounting to €4.3bn.
Meanwhile, life sciences, engineering, environmentally friendly technology, paper print, packaging and electronics saw an increase of 10pc to €3.9bn.
One area that certainly did not enjoy similar success was in exports to the UK, as, despite totalling €75bn, its percentage growth fell from 12pc in 2015 to 2pc in 2016.
Impact of Brexit is already clear
Trying to pinpoint the reason for this sharp decline, Enterprise Ireland said that it was largely down to a drop in food exports to our nearest neighbour.
“The fact that the growth of exports to the UK has slowed suggests that the impact of Brexit on Irish companies has already started,” said Enterprise Ireland’s CEO, Julie Sinnamon.
“Companies cannot afford to wait until the Brexit negotiations conclude – they must act now. While diversifying from the UK might have been a desirable objective for Irish companies in the past, Brexit means that it is now an urgent imperative.”
The EU plan
To make up for the inevitable decline of UK trade post-Brexit, Enterprise Ireland has promised to double-down on its efforts to boost trade with the EU.
Releasing details on its Eurozone strategy, the organisation said that it plans to assist Irish companies to increase exports in Eurozone countries by 50pc by 2020.
This includes partnering with around 600 companies, half of which are ‘Eurozone Start’ – companies very reliant on the UK – while the remainder are ‘Eurozone Scale’ and are already exporting to the Eurozone.
“This strategy is about driving one of the most significant shifts in the footprint of our client exports into the Eurozone,” Sinnamon said.
“We have to work on the basis that Brexit will create new barriers to Irish trade with the UK. On the other hand, Eurozone markets can provide currency stability, proximity, and potential for growth and opportunities for Irish companies.”
While the EU is now the focus of the Enterprise Ireland’s post-Brexit action plan, other regions of the world saw an increase in 2016.
In the US and Canada, exports increased by 19pc on the previous year to €3.7bn, while the Asia Pacific region received a boost of 16pc to €1.8bn.