InterTradeIreland, the cross-border trade and business development body, has announced that total cross-border trade in goods is at an all-time high and has been growing at an average rate of 4% per annum over the past 20 years, currently standing at £6.11bn for 2017.
This announcement comes as InterTradeIreland marks 20 years throughout 2019. The cross-border body has assisted over 39,000 businesses, created/protected 14,800 jobs and generated more than £1 billion in business development value through its programmes and initiatives since it was established 20 years ago (1999).
Based in Newry, InterTradeIreland (ITI) provides SMEs across the island of Ireland with sales growth, innovation, business funding and business insight support. It has a remit to support increased cooperation in trade and competitiveness and helps small businesses in Northern Ireland and Ireland explore new cross-border markets, develop new products, processes and services and become investor ready.
The organisation also launched a Brexit Advisory Service in May 2017 to help companies prepare for the British exit from the EU.
Aidan Gough, Designated Officer and Director of Strategy and Policy at InterTradeIreland, discusses the impact that cross-border co-operation has had on Northern Ireland:
“It has been 20 years since InterTradeIreland was founded formally in the British-Irish Agreement Act, 1999. Much has changed in the intervening years. Increased co-operation is a demonstrable outcome of that Agreement and has undoubtedly benefited businesses on both sides of the border.
“Research commissioned by InterTradeIreland after it was founded showed the actual level of cross-border trade was significantly below that which you could expect between two economies in such close proximity. InterTradeIreland set out to change this. Working with manufacturing and tradable services companies and ambitious SMEs with a solid trading record we introduced a series of innovative programmes and initiatives. We supported businesses to take advantage of North/South co-operative opportunities to improve capability, drive competitiveness, growth and jobs.”
Mr Gough continues: “The microeconomic impact that InterTradeIreland has had through its programmes and initiatives over the last 20 years is significant. It has provided assistance and guidance to over 39,000 companies, with 9,000 companies benefiting through trade and innovation projects generating over £1 billion of additional business development value and 14,800 jobs.
“At a more macroeconomic level, total cross- border trade in goods has been growing since 1997 at an average rate of 4% per annum and currently stands at £6.11 billion for 2017. The benefits to firms involved in this trade are more pervasive than you may think.
“At present Northern Ireland makes up between 10 – 12% of total exports from Ireland to the UK and accounts for 7-8% of imports. For a population size of just 2.9% of the UK total these trade figures with our nearest neighbour are substantial and highlight growing cross-border co-operation and the associated dividends for Northern Ireland businesses.”
Discussing exports Mr Gough says: “Northern Ireland exports to Ireland were worth some £3.9bn to the local economy in 2017, with 758,000 cross-border deliveries. In addition, there were approximately 410,000 import deliveries in 2015 from Ireland to Northern Ireland businesses worth nearly £2.0bn, not including financial and farm sectors. These figures represent important components of Northern Ireland’s private sector economic activity and for Northern Ireland goods trade represent a 115% increase in sales value since 1997.
“For over half (51%) of Irish exporters, Northern Ireland is the destination for more than 50% of their exports, while for 26% of Irish firms, Northern Ireland is their only export market. The cross-border market also plays a valuable role in a broader export development strategy, with 71% of exporters reporting that cross-border trading was the catalyst for exporting further afield, of the island.
Mr Gough continues: “Exporting firms have been proven to be more innovative, more productive and more resilient than their non-exporting counterparts. How these exports’ benefits are reflected in Northern Irish firms trading across the border was recently investigated in InterTradeIreland’s publication Export Participation and Performance of Firms on the Island of Ireland.
“Goods firms which export across the border are found to have a productivity boost of 9%. In terms of turnover those same firms that trade across the border have a 93% higher turnover than firms that sell only in the local market and employ 46% more people.”
Mr Gough concludes: “Participation in cross-border exporting is clearly making an important contribution to the performance of individual businesses, local rural economies, and the broader economy on the island. We now see cross-border sales value growing at 4% per annum, worth €6.99bn/£6.11bn in sales and supply chain imports. We see firms trading goods across the border operating at least 9% higher productivity than those that don’t. They have higher employment rates and turnover too, all of which feed into the often rural economies where they are based.
“The economic dividend of peace and cross-border cooperation has delivered, and with only 15% of goods produced in Northern Ireland being exported beyond its border, and only 1.6 % of Irish goods exports going north, there are still plenty of opportunities for the further growth that exporting delivers.
Of course, there are challenges on the horizon, and it is impossible to ignore the impact of Brexit.
Mr Gough continues ‘Brexit will affect firms on both sides of the border but action now can help businesses prepare for the imminent challenges and opportunities that will arise. It is my hope that we can help SMEs take the first step in preparing for their future through the supports and expertise of our Brexit Advisory Service and that we can equip companies to deal with whatever changes happen post Brexit.
For further information on InterTradeIreland log onto https://intertradeireland.com
InterTradeIreland is funded by Department for the Economy (DFE) in Northern Ireland and Department of Business, Enterprise and Innovation in Ireland (DBEI).