The UK’s importance as a trading partner for Ireland has declined, according to the latest research from HSBC.
The HSBC ‘Navigator: Now, next and how’ survey of over 9,100 companies in 35 countries and territories found that the UK’s importance as a trading partner for Ireland has declined, from 73% of Irish businesses seeing it as an important trade partner in 2018 to 43% in 2019. However, 77% of Irish businesses expect sales growth next year, with almost one in five companies forecasting growth of 15% or more.
Irish businesses expect growth to be driven by new markets opening up (44%), transformative technologies (30%) and improvements in logistics and transportation (23%) over the coming year.
According to the report’s findings, Irish businesses look set to focus on opening up new markets and introducing new products and services, focusing more on these than their counterparts in Europe (37%; 28%) and globally (38%; 30%).
The report shows that Germany (2019: 23% vs 2018: 20%) and France (2019: 21% vs 2018: 10%) have both become more important trading partners for Ireland, with France’s importance doubling since last year’s report.
There is also evidence of a growing structural shift in Irish trade strategy away from Europe in the next five years with North America surging in popularity. Almost a third of Irish businesses aim to do business there compared to one in 10 last year. Latin America has become a rival to France as a prospective market, largely at the expense of Europe as a region. HSBC say the proposed EU-Mercosur trade agreement will see customs tariffs for Irish businesses scrapped, creating new opportunities for trade with these countries.
Speaking about the report’s findings, HSBC Ireland CEO, Alan Duffy said, "The latest Navigator report shows that while shifting geopolitical currents have impacted on Ireland’s trade relationships, Irish businesses are adapting their trade strategies accordingly to focus on new markets and new opportunities."
He added, "Changes to the political and regulatory landscape have prompted Irish businesses to look to new markets, evidenced by the growth in popularity of Latin America as a trade destination. Ireland’s reputation for favourable partnership opportunities and culture of innovation should provide Irish businesses with an excellent platform to build these new trade relationships."