Export growth expected to hold up but challenges not in short supply

Ireland’s success in export markets has been one of the key factors underpinning the economic strength of the country in recent years.

Exports boomed in 2022 to a record €32 billion, up 19 per cent on the previous year. Figures for 2023 won’t be available until spring 2024 but Tom Cusack, Enterprise Ireland’s (EI) head of global markets, anticipates another strong set of results for this year, albeit at more modest growth levels.

The 2022 figures saw strong performances across the board in all geographies and sectors. Exports to the EU rose 28 per cent, North America saw a rise of 13 per cent, while, despite Brexit, a similar rise of about 13 per cent was recorded in exports to the UK. Food and sustainability led the way, with a rise of 28 per cent in this category. Equally impressive, there were strong performances in technology and services (up 18 per cent) and industrial and life sciences (up 14 per cent).

This strong performance has been built on the back of our hard-won reputation for quality, service and innovation, Cusack says.

Bushmills Irish Whiskey explores new territory with “unmistakably different” 14-year-old Malaga cask single malt

---

Sustainability: A whole new set of reporting with potential to be transformative

---

Tools and applications, in common use elsewhere in life, are still not standard in healthcare settings

---

Futureproofing the health system requires a new prescription

---

“When you look at our success over the last number of years it has really been a case of building out from the traditional sectors where we have been really strong and introducing a technology component into that,” he says. “So, you have agritech, fintech or travel-tech – all sectors that are that are growing strongly and where we have been able to compete successfully.”

Rising interest rates and increased geopolitical tensions may be dampening down optimism globally but Cusack says he has not yet witnessed a slowdown in activity among EI client companies that are still participating enthusiastically in trade missions, buyer events and entering new markets.

“There’s no shortage of challenges but companies have shown agility and the capacity to diversify, and they certainly remain optimistic,” he says.

One area that export-led companies need to pay strong attention to is sustainability. Long talked about, there is now real and growing pressure to demonstrate credentials in this area. The issue is coming to a head with the implementation of the corporate sustainability reporting directive (CSRD) by the EU, which will soon affect 75 per cent of all businesses in the bloc.

A key concept of the CSRD is “double materiality”. This means that firms will be expected to report on how sustainability issues affect their business in terms of costs, risk or growth and what impact a business has on people and the environment.

“That needs to be a number one priority because we’re now seeing customers looking at the sustainability credentials of Irish suppliers and there’s a real threat you will be knocked off procurement opportunities if you don’t have a clear roadmap, and clear plan to get to net zero,” says Cusack.

“I think there will be a short period where companies would be expected to transition but I think you will see in the next 12 to 18 months that this would be an absolute deal breaker for companies if they don’t have a proper plan.”

Simon McKeever, chief executive of the Irish Exporters Association, agrees that this is now a top priority.

“This is a massive area of concern for Irish exporters and we are coming at it too late,” says McKeever. “There’s a very real prospect of companies getting shut out of markets if they don’t get on top of this.”

McKeever is also concerned about domestic and international issues having a dampening effect on prospects for exporters. Domestically, he cites housing and increased labour costs as key competitiveness issues; and he notes weakening markets in the EU, especially Germany, and the UK.

Conflicts in Ukraine and the Middle East, as well as an upcoming cycle of elections in Ireland, the UK and the United States, are all contributing to an atmosphere of uncertainty, he says.

“Talking to members lately, I came away with a distinct sense of a battening down of the hatches,” says McKeever.

He believes Ireland has now moved into technical recession, a view supported by an OECD report published at the end of November. It suggested that weaker exports, together with a fall in investment, will see the Irish economy decline for the first time since the financial crisis, forecasting that GDP will fall by 0.6 per cent in 2023.

The body warned that heightened global uncertainties, a weaker trading outlook and higher interest rates will have a downward effect on Irish exports and investment levels which, McKeever says, already fell dramatically in the first half of this year.