Brexit ‘forecasts of doom have lifted’ as Irish exporters eye UK again

The "forecasts of doom" surrounding the UK's exit from the European Union have "lifted strongly", and there is now "a lot of optimism" among Irish exporters in terms of the business to be done there, Enterprise Ireland chief executive Leo Clancy has said.

Mr Clancy was speaking after the State agency that supports indigenous Irish businesses to grow and export abroad published an annual report which showed affiliate companies created a net 11,911 jobs in 2021. That was the highest annual increase it has reported.

"The UK is going to continue to be a key market for Ireland, " Mr Clancy told The Irish Times. "There is a lot of business to be done there with the levelling up agenda, with a lot of the economic bounce they are seeing as they roll out their stimulus programmes.

“The picture is much, much brighter versus where we were in 2017 and 2018 when there was vast uncertainty about things like trade replacement, and new global trade deals that would displace Ireland completely.

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“Some of those forecasts of doom have certainly lifted strongly. There is actually a lot of optimism about the UK now. People have worked out what Brexit looks like. I think even the spectrum of the best to the worst outcomes at the moment is actually pretty narrow.”

Inflation

Mr Clancy said the “big worries” for Enterprise Ireland companies are in skills availability and labour, and “particularly around inflationary factors around cost of input, cost of logistics, and availability of supply chain to get materials in and products out to customers”.

“Skills and labour availability is a global issue at the moment but it is a significant issue for companies,” he said. “It is one that is going to need monitoring. It’s probably one that we will need to stay on top of in the next year.

“On the inflation and supply chain issue, there are various predictions for when it will peter out. I think it will be with us for the remainder of 2022. We’re not seeing any unwinding of supply chains or it getting easier for people to access logistics.”

In terms of the Covid-19 pandemic, Mr Clancy said the spectre of so-called zombie businesses surviving only because of State supports was not a trend he has observed in the economy.

“We’ve seen small numbers of company closures thankfully in the context of everything that has gone on in the past few years,” he said. “We don’t see that there is a very heavy systemic leaning on State supports across the business ecosystem.

“That is definitely not a trend that is front of mind. I’ve met entrepreneurs across the country over the past six months and there is good confidence around the future. Obviously there are some companies that are more impacted than others.”

Climate change

The agency also set out a three-year roadmap on Tuesday in which it pledged to help the enterprise sector reduce emissions by 29-41 per cent by 2030.

“It’s a very, very challenging target across the board,” Mr Clancy said. “We are seeing a real emphasis on this though in companies’ business plans. There has been a marked uptick.

“What’s become evident in the past year is that if you don’t focus on sustainability as a company you will not only cause yourself problems with costs down the line but you will also damage yourself in the market.”

The roadmap also sets a target to create 45,000 new jobs by 2024, with two-thirds of those outside of Dublin.