by Frank Schnittger
Thu Mar 18th, 2021 at 08:16:58 PM EST
Annualised GDP growth per Quarter
Despite Brexit and the Pandemic, the Irish economy is predicted to record the highest growth rate in the world in 2020 thanks to a heavy concentration of pharma and medtech companies in the economy. Current projections for 2021 and 2022 are for continued growth in the 3-4% range. Gross GDP figures are, of course, hugely inflated by the activities of global corporations in the economy, but these % growth rates are on a like for like basis.
2020 exports grew to 161 Billion (+5%) driven mainly by pharma exports of 62 Billion (+25%). Ireland is a global hub for pharma and medtech, playing host to 24 of the top 25 biggest players, including Pfizer, Johnson & Johnson, Roche, Novartis and AbbVie.
Despite this overall growth, the value of exports to Britain in 2020 fell by 9% to 12.4 million and accounted for only 8 per cent of total Irish exports, down from 11% in 2019. When Ireland joined the EU 1973, the UK accounted for 70% of total Irish exports, and this figure has been in steady decline ever since.
Overall imports, on the other hand, fell to 85 Billion (-6%) with the decline driven mainly by transport equipment including aircraft (-41%) and petroleum (-40%). Imports from Britain decreased by 5 per cent, and accounted for 21% of total Irish imports in 2020, down from 24% in 2019.
Thus despite a booming economy, trade with Britain declined from 11% to 8% of total exports, and from 24% to 21% of total imports between 2019 and 2020. And this is before Brexit came fully into effect. And now, Brexit trade disruption fuels boom at Irish and French ports
The ferry leaving Cherbourg on Thursday night for Rosslare had a full load of more than 100 trailers and trucks, while the nearby vessel bound for Portsmouth in England was less than one-fifth full.
The surge in demand for the routes linking the island of Ireland to the rest of the EU has fuelled a Brexit boom at French ports such as Cherbourg, Dunkirk and Roscoff, and at Rosslare in south-eastern Ireland.
"There was a tremendous shift in traffic with Brexit - and the paperwork - and the realisation that D-Day was finally here," said Glenn Carr, general manager at Rosslare port.
As a gale blows in from the chilly sea, Carr explains how the port, which "hadn't seen growth for a long number of years", has taken the benefit of a sudden jump in traffic and freight volumes.
"We went from three services [each way] last January to now today doing 16 sailings a week, which is 32 services to and from Rosslare to Europe," he said.
Meanwhile, the UK economy is estimated to have declined by 9.9% in 2020 with this agency report quoting Chancellor of the Exchequer Rishi Sunak attributing the catastrophic decline entirely to the pandemic. I wonder what the excuse will be for this year, what with the UK leading the way on vaccinations.
It will take some years for the impact of Brexit on the British and Irish economies to be disentangled from the pandemic and for medium and long term trends to become clear. The short term trends for the UK are not promising, however, with more and more Irish firms switching suppliers from the UK to the EU to avoid Brexit created paperwork.
Amazon is setting up a distribution hub in Ireland having previously serviced the Irish market from the UK, and that seems to be the growing trend for more and more businesses. There are also signs of increased integration of the Irish and N. Ireland economies.
Ireland is the only European country with which the UK has a substantial trade surplus (5.4 Billion, in 2020) and it is this trade surplus which is under threat, if these trends continue. What is the point of the UK joining the Trans Pacific Partnership, if it is losing its markets much nearer to home?