All-island trade statistics

Annual Trade Commentary 2008

Introduction
Cross-border trade in both directions decreased in 2008, which is a reverse of the solid increasing trend established since the low point of 2003. In 2008 total cross-border trade was 11.7 per cent smaller than that in 2007. The size of the trade surplus in Northern Ireland’s favour has decreased slightly in 2008 with trade from North to South falling more rapidly (12.3 per cent) than that from South to North (10.6 per cent).

All Manufacturing
Total cross-border trade decreased in 2008 by an overall figure of 11.7%. This decrease was a combination of Ireland’s trade to Northern Ireland falling by 10.6% and Northern Ireland’s exports to Ireland falling by a slightly bigger margin at 12.3%.

Despite recording falls in overall manufacturing trade, some sectors had a successful year. Northern Ireland had an export boom in both the Transport Equipment and Food, Drink & Tobacco sectors, while Ireland had its most significant sectoral increase in Electrical and Optical Equipment.

Trade from South to North remained smaller than North to South trade in 2008. The divergence between the two economies in recent years was replaced by a convergence in trade values during the year.


Sectoral trends during 2008

Food and Drink
Food and drink is the single biggest component of cross border trade. In 2008 it accounted for 36% of total trade which was the same as in 2007. North to South trade enjoyed a rise of 15.9%, while South to North trade fell 4.2% from 2007. This is an export sector for Ireland which has proved particularly vulnerable to the appreciation in the Euro against Sterling.

Textiles, Clothing and Leather
The total performance of North to South and South to North trade combined saw a drop of 24.7% on the previous year. The decline in trade in this sector since 2006 continued with North to South decreasing by 24.6% and South to North by 24.9%.

Wood and Wood Products
Trade in a North to South direction had been increasing since 2001, driven perhaps by the construction boom, and this trend was reversed with a fall of 39.8%. A fall also took place in South to North trade which saw a decrease of 30.4%, the first fall since 2003. The sharper fall in one direction means that Northern Ireland’s surplus value was reduced by half this year to €87.6 million.

Pulp, Paper and Publishing
Total cross-border trade in this sector recorded a relatively small fall of 3.2%. Although the North’s trade to the South only rose by 0.8%, the fifth consecutive year on the rise, the divergence pattern since 2001 continued this year as South to North trade figures recorded a fall of 23.1%. This means that the value of trade from South to North (at €25.3m) is the lowest it has ever been and the value of trade from North to South (at €163.6m) is nearly as high as it was in 1998.

Chemicals and Chemical Products
Overall trade in this sector fell by 4%. There were differences in trade between the two jurisdictions. North to South trade saw a rise of 12.8%; however, in the other direction, trade fell by 7.6%. It is worth noting that this sector in the South continues to have a bigger monetary value (by a multiple of four) than its neighbour in the North.

Rubber and Plastics Product
There was an overall decrease in this sector of 22%. Trade in both directions contributed to this as South to North trade suffered a drop of 15.4% while North to South fell by a higher amount of 24.2%.

Non-Metallic Mineral Products
In recent years both countries showed an upward trend in trade of non-metallic mineral products, again largely driven by demand from the construction industry. However in 2008 there was a massive dip in trade from North to South with a decrease of 40.8%, the biggest fall recorded this year in any sector. There was a more moderate fall in trade value from South to North of 15.3%. Hence overall trade changed dramatically with a fall of 34%, the first fall recorded since 1999.

Basic Metals and Products
This is the second largest sector in terms of total cross-border trade (a 10% share) and it saw its overall value rise by 1.1%, continuing a rising trend since 2002. This rise was helped by the North’s exports rising by 8.4%, while trade from South to North fell by 18.3%. This means that the convergence between the two directions that had occurred since 2005 has been reversed with a divergence pattern for 2008.

Mechanical Engineering
Having reached an all time high value in cross-border trade last year, 2008 saw a sharp fall of 33.5%. This decline occurred in both directions: South to North was more badly hit with a fall of 39.1%, compared to a fall in North to South trade of 28.7%. The biggest sectoral fall in South to North trade was recorded in this sector.

Electrical and Optical Equipment
Despite good gains made in 2007 to reach a new high point for this sector, those gains have nearly been wiped out with a massive fall of 33.2% in 2008. North to South trade saw the biggest fall in this sector with a depreciation of 46.0% with the monetary value reduced to the levels of 2006. On the other hand, South to North trade rose by the sectoral biggest margin in that direction, 58.8%. This has meant that the South’s sectoral trade deficit has been reduced by around a third over the course of 2008.

Transport Equipment
Cross-border trade in this sector improved by the biggest margin of 7.3% in 2008. This was mainly due to an enormous gain of 56.5% in the North to South direction (the largest sectoral gain in that direction). However, the reverse was the case with trade in the other direction with a depreciation of 24.4%. This resulted in the North having a trade surplus in this sector for the first time.

Manufacturing, Not Elsewhere
Overall trade value in this sector decreased by 9.9%. Trade in a North to South direction suffered a large decrease of 25%, the same percentage decrease as in 2007. In the other direction there was a rise of 20.1%. This has meant the North’s trade surplus in this sector has been reduced from €67.4 million to €19.4 million.

[NOTE: This sector includes the manufacturing of sports goods, games and toys, furniture for kitchens and offices, jewellery, musical instruments. Perhaps more importantly this also includes refined petroleum although the exact cause of the volatility is unknown.]