Ireland advised to look to emerging export markets to counter slowdown

Ireland will have to develop deeper export opportunities in developing countries to compensate for the slowdown in traditional markets over the next decade, a study by HSBC has found.

In a comprehensive study of global trade flows over the next two decades, the bank forecasts that Irish exports to Europe, excluding Russia, will expand at an annual rate of 3-4% between now and 2020.

The study finds that exports to Europe will increase only marginally, to average 5% each year between 2020 and 2030. Moreover, Irish exports to the US and Britain will grow at an average rate of 5% every year between 2020 and 2030.

Managing director and Ireland head at HSBC Corporate Banking Alan Duffy said: “Ireland’s export sector has been the sole bright spot in the economy this year, with its out-performance driven by a sharp improvement in competitiveness and Ireland’s focus on high value -added sectors such as high -tech industry.

“Nevertheless, we can’t continue to rely on the eurozone, US and UK for our trade growth. Forward- thinking companies will have to exploit multiple trade corridors and partnerships, particularly in emerging markets.”

Though China will be a crucial market for Ireland in terms of cultivating new trade relationships, HSBC says the Middle East and Latin America will become increasingly important in the future.

“There is a growing demand for information technology products as the economies of these regions mature,” he said.

“Growth in Irish exports to these two regions is set to rise by 6-7% a year in the 2021-2030 period.”

The report finds that even though the main eurozone economies will start growing again from 2013, the impact of deleveraging as governments and the private sector pay down debts will mean that growth will be constrained for the foreseeable future.

But positive developments will emerge across the global landscape from 2015 onwards. Over the next few years, trade between emerging economies will become more established, which means trade will become more globalised and integrated from 2016 onwards.

“Powerhouses India and China will be joined by emerging trading nations including Vietnam, Indonesia, Egypt, Turkey, Mexico and Poland to record significant trade growth in the next three years.

“As these economies industrialise, trade in higher value goods will increase,” the report said.