Irish exports hit a record €22.2 billion in September 2024, reaching €166 billion for the first nine months of the year, an increase of 12 per cent over the same period in 2023. While these exports are largely driven by medical and pharmaceutical products, sustained export growth has historically been a feature of Ireland’s economic success leading to our overall prosperity.
As the only English-speaking nation in Europe, with both a highly talented workforce and a stable pro-business economy, Irish companies have a huge advantage and opportunity to continue to grow and prosper, if they are supported, according to Colm O’Callaghan, tax partner with PwC.
In this regard, despite the many recent challenges that the sector has faced, Irish companies are increasingly looking to diversify into new international markets in search of opportunities and are continuing their focus on innovation and high-value sectors and services.
“This will hopefully ensure that the indigenous export market can sustain any geopolitical changes that may occur over the near team, particularly should countries start to adopt a more local, or protectionist, approach to international trade,” says O’Callaghan.
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“However, the big challenge to capitalise on and ensure the sector’s continued growth is going to be maintaining competitiveness, especially as rising costs can significantly impact on export growth in an open economy like Ireland’s,” he says.
While many Irish exporters are multinationals, many are also indigenous companies. PwC’s 2024 EMEA Private Business Attractiveness Index ranked Ireland in ninth place among 33 EMEA countries as a location for private businesses to thrive, down from seventh place the previous year. This reflects the intense pressure that some private businesses are under and the urgent need for continued support for this important sector of our economy.
Long term, simple and clear policy measures aimed at supporting private businesses to export and expand, should be a key priority for any government over the next 12 to 24 months, O’Callaghan believes.
“The first thing we need to do is to help support indigenous private businesses, many of whom are exporters, to become world leaders in their sector. By supporting exporting businesses to invest in their finance teams and their transformation journey, this will help them scale and internationalise faster. Furthermore, encouraging and supporting entrepreneurs to build, scale and internationalise through enhancing Entrepreneurs’ Relief and ensuring it also applies to the payment of a salary to the entrepreneurs instead of only applying when they sell their business, will encourage the retention of many Irish businesses to become world leaders.
“We also need to continue to prioritise supports to help these businesses with innovation and R&D through continuing to enhance and support our reliefs and incentives in this regard. Overall, if the new Government can have a clear, simple and stated policy to help private exporters flourish and grow, it will make a notable long-term contribution to Ireland’s export economy,” says O’Callaghan.
Carol Lynch, partner, customs and trade, BDO, says that of particular concern is that the US now represents our largest export market outside the EU, with 31 per cent of total exports in September – growth of 64 per cent on September 2023.
“The fact that September was our record month for exports overall and also our record level of exports to the US illustrates a vulnerability for the Irish economy in the context of anticipated tariffs that would lead to a contraction around the US multinational presence here following the election there,” says Lynch.
“Within this, a significant concern for us is that the pharmaceutical and chemicals sectors now represent nearly two-thirds of all exports and around 80 per cent of our exports to the US are in this space. Concerns around this may also have been heightened by the appointment of Robert F Kennedy jnr as health secretary. The outcome here remains to be seen, but with all of this, plus the likely Trump administration focus on tariffs and reshoring industries, we may have some adjustments ahead.”
Lynch also says that potential US trade fluctuations will be even more significant in the context of the reduction of exports to Britain over the first nine months of this year. However, she acknowledges that access to overseas markets continues to help indigenous companies to grow much faster.