New report highlights level of cross border trade

Exports from Northern Ireland into the Republic are significantly higher than the amount of trade moving in the other direction.

A report published by the North's Statistical Research Agency shows the difference to be almost 85%.

The report estimates that in 2016, Northern Ireland businesses in the non-financial and non-farm sectors made some 758,000 cross border export deliveries to the Republic. This was estimated to be worth in the region of £3.4bn to the Northern Ireland economy in 2016.

There were approximately 410,000 import deliveries in 2015 from the Republic to Northern Ireland businesses worth nearly £2.0bn.

74% of the export deliveries from Northern Ireland in 2016 were made by small businesses with fewer than 50 employees, with a third of those carried out by micro businesses with fewer than 10 employees.

Businesses in Distict Council Areas along the border had the highest number of cross border export sales.

The report recommends further research, saying more information is necessary on the cross border movement of goods between Northern Ireland and Ireland to inform EU exit.

Report text - https://www.nisra.gov.uk/publications/eu-exit-analysis-publications

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Press release in full - 

NISRA and DFE Cross Border Supply Chain Report 

NISRA and the Department for the Economy (DfE) published results today from their Cross-Border Supply Chain survey and analysis of Northern Ireland – Ireland trade data.

1. DfE commissioned NISRA to undertake a survey of Northern Ireland businesses who trade with Ireland and provide detailed analysis of HMRC trade microdata. The objective was to provide more detailed information on the frequency and value of cross border movements of goods and the extent of cross border supply chain linkages to inform EU Exit discussions.

Value and Volume of Cross-Border Trade

2. Provisional estimates indicate that Northern Ireland VAT and PAYE registered businesses (in the non-financial and non-farm sectors) made some 758,000 cross border export deliveries to Ireland. This was estimated to be worth some £3.4bn to the Northern Ireland economy in 2016. In addition, there were approximately 410,000 import deliveries in 2015 from Ireland to Northern Ireland businesses worth nearly £2.0bn in the sectors covered by the survey.

3. The majority (74%) of the (758,000) export deliveries in 2016 were made by small businesses (with fewer than 50 employees) with a third carried out by micro businesses (with fewer than 10 employees).

4. Much of the volume of Northern Ireland businesses’ cross-border trade was comprised of low value trips but these accounted for just less than one fifth of the total value of exports. In contrast just over 20% of Northern Ireland businesses who export to Ireland made deliveries to Ireland worth more than £4,500 per trip. Such businesses accounted for most (82%) of the value of Northern Ireland’s exports to Ireland (£3.4bn) in 2016.

5. Exports to Ireland accounted for more than 15% of businesses’ (Northern Ireland + Ireland) sales for five of Northern Ireland’s District Council Areas (DCAs) in 2015. On average Northern Ireland businesses located in DCAs along the Northern Ireland – Ireland border showed a greater propensity for cross border trade than NI businesses located further away from the border.

Supply Chain Activity (HMRC trade data)

6. Thirty nine per cent of Northern Ireland’s (above the Intrastat reporting thresholds) trade with Ireland was comprised of “intermediate” products i.e. goods that are used as inputs into the production of other goods. This provides a key indicator of the extent of North-South supply chain activity.

7. This figure increased to two thirds (66%) of the value of Northern Ireland’s trade with Ireland when (bilaterally traded) agri food products for final consumption such as meat and fish, foodstuffs, dairy products and beverages, most of which are transported in a time sensitive manner, are included.

8. On a similar basis, slightly less (62%) of Northern Ireland’s trade with the Rest of the EU also showed evidence of such supply chain activity, as did 53% of Northern Ireland’s trade with the Rest of the World. However Northern Ireland’s trade with these destinations was more heavily influenced by trade in capital goods (21%, 23% of trade respectively) than Northern Ireland’s trade with Ireland (7% of such trade).

Comments

The provisional results from NISRA’s new survey has highlighted that there were 1.2m export and import cross border business deliveries (in the non-financial and non-farm sectors) relating solely to Northern Ireland’s trade with Ireland. It is clear most of the volume of cross border trade is comprised of relatively low value transactions. However, just over a fifth of Northern Ireland businesses accounted for over 80% of the value of exports.

These movements only refer to trade by Northern Ireland businesses registered with HMRC for VAT purposes and therefore exclude some 58,500 small traders or self-employed who fall below the turnover threshold for VAT.

Accompanying analysis of HMRC trade micro data also shows that two-thirds of Northern Ireland’s trade with Ireland relates to goods that could be considered part of a cross border supply chain. This includes both goods crossing the border as inputs used to produce other goods to delivering and the delivery of foods to wholesalers and retailers in a time sensitive manner. There are also significant local supply chain linkages with the Rest of the EU and the Rest of the World.

The new survey and analysis paint a rich picture of the web of cross-border connections and trade between Northern Ireland businesses and businesses and consumers in Ireland. This is, however, only a partial picture of the movement of goods across the border, as Northern Ireland relies heavily on moving and receiving goods through ports in Ireland for its trade with Great Britain. Previous estimates have indicated that Northern Ireland sales of goods to Great Britain are worth nearly four times that of sales of goods to Ireland of which the current exercise does not take account. North-South supply chains cannot be considered in isolation from trade with Great Britain and this remains an area for further research.

However, the current report provides greater detail than previously available on the incidence and purpose of cross border movement of goods between Northern Ireland and Ireland to inform EU Exit.