Brexit effect still lingering as Irish exports to Britain plummet by 12%

The value of Irish goods exports to Britain across January and February amounted to just over €1.81bn — down by nearly €250m on the same two months last year

Economists think it remains far too early to tell the true impact of Brexit on Ireland's trading relationship with Britain, despite exports taking a massive hit since the turn of the year. Picture: Eddie O'Hare

Brexit is still negatively impacting Ireland’s trading relationship with Britain, with new figures showing a 12% year-on-year slump in the value of exports to Britain in the first two months of the year.

However, economists believe it remains too early to know if current trends merely illustrate early Brexit teething problems or if they represent a wholesale change in trade between the two countries.

The CSO said the value of Irish goods exports to Britain — mainly comprising food products — across January and February amounted to just over €1.81bn. This was down by nearly €250m on the same two months last year.

Imports from Britain, meanwhile, fell by 57% — or €1.6bn — to €1.2bn.

“Trade has become more difficult due to bureaucracy around customs, while the stockpiling of goods in the final quarter of last year artificially massaged figures to the upside,” said economist Jim Power.

“Figures from April onwards will be more telling, as the stockpiling effect dissipates and it becomes clearer if the problems seen in the early months of the year have been teething issues or are representative of a more fundamental shift," he said. 

I would think we’re looking at a combination of both — there certainly have been teething problems, but doing trade with the UK is more difficult full stop.

Dermot O’Leary, chief economist with Goodbody, said the unwinding of the stockpiling of goods in the run-up to what was a potential hard Brexit and “increased friction” associated with trade from the start of the year are to blame for the reduction in trade.

“It will take some months for these effects to wash through so that a proper assessment can be made on the impact of Brexit on trade between the two islands,” he said.

A partial recovery in trade between the EU and the UK in February, as seen in figures published earlier this week, bodes well, although the latest figures were skewed by the impact of the Covid pandemic.

Overall, Irish exports remained flat in February on a monthly basis, at just over €13bn; but increased 7%, year-on-year, to €12.3bn.

The US was the destination for 35% of Irish exports in February, with the EU accounting for 38%. Of the €4.6bn to the EU, €993m worth went to Belgium; a large market for Irish pharmaceutical exports.