Alan Duffy, CEO and Head of Banking, HSBC Ireland
The latest HSBC Navigator report shows a strong year ahead for Irish trade, yet Brexit is seen as a huge challenge and a force of uncertainty.
The study brings together an economic forecast of medium- to long-term bilateral trade and a global survey analysing business sentiment.
Out of all of the Irish businesses surveyed, 71% expect an increase in trade volumes over the next year, which will be driven by favourable economic activity and increasing demand for individual products.
Worries about the negative impact of Brexit permeates the minds of 75%. The UK bought 14% of Irish exports and supplied around 25% of imports last year. However, the share is much higher depending on what sector you are speaking of, and are more susceptible to tariffs and non-tariff barriers.
The UK is still seen as a top growth market for Irish companies, followed by the US and Germany.
Alan Duffy, HSBC Ireland CEO and Head of Banking, commented on the finding, saying, “The latest Navigator report shows that while Irish exporters are unsurprisingly negative about the UK’s departure from the EU, they are optimistic about the outlook for trade with the UK.
Irish businesses are set to continue diversifying their global trading links with emerging economies, with the markets once again identified as being of most importance in driving export growth, with sales to China, India and the UAE all set to rise.”
Other concerns for companies lie in overprotective governments (52%), increase in costs (almost two-thirds) and reduced opportunities for international business (38%). Nearly all of the respondents (96%) see cybersecurity as an increasing concern and over two-thirds (70%) see data regulation as a barrier to trade.
The top destinations for exports, according to the report, will be new, emerging economies, such as China, India and the UAE, which are forecast to rise by 6-8% per year from 2021 to 2030. Also included in the top ten are advanced economies such as Singapore and Canada.
The top export sectors will be chemicals, pharmaceuticals and industrial machinery on the goods side, while B2B, information and communications technology (ICT) and financial services will remain important forms of services exports to 2030.
Alan Duffy went on to say: “Ireland’s combination of low business taxation, a skilled workforce and its use as a base by a range of multinational companies all contribute to a forecast showing the nature of Irish goods exports being broadly stable over the next decade. Ireland’s competitive advantage in the goods and services sectors it exports also ensures that no serious shift in the composition of Irish goods and services exports is expected. Both of these points combined point to a positive trade outlook for Irish businesses over the coming months.”