Record increases in Northern Ireland trade

Published annually by NISRA, the Northern Ireland Economic Trade Statistics (NIETS) appraises trade between local businesses and markets inside Northern Ireland and beyond. Most recently published in December 2022, the NIETS utilises both the sale/export and purchase/import of goods (tangible products) and services (intangible products) in non-financial industry sectors (not including trade in the public sector, insurance sector, and most of the agriculture sector).

Sales/exports

In 2021, turnover, or total sales, by companies located in Northern Ireland was valued at £77.1 billion, an increase of 13.6 per cent on 2020 (£67.9 billion). In the same year, total purchases by businesses were estimated to be £48.7 billion in 2021.

Of this total, 67.6 per cent (£52.1 billion) were sales within Northern Ireland. The remaining 32.4 per cent of sales (£24.9 billion) were split almost evenly, with 51 per cent (£12.8 billion) going to the market in Britain and 49 per cent going to markets elsewhere*. Sales to Britain and sales to elsewhere accounted for 16.6 per cent and 15.8 per cent of sales respectively in 2021.

At the same time, exports (or sales outside the UK) of goods (£9.2 billion) and services (£3 billion) were worth a combined total of £12.8 billion, an increase of 16 per cent on 2020. Exports of goods increased by 13.7 per cent (£1.1 billion) while the export of services increased by 23.6 per cent (£0.6 billion). In total, exports of goods accounted for 75.8 per cent of all export sales in 2021, while exports of services represented 24.2 per cent.

Totalling £51.3 billion, the sale of goods accounted for exactly two-thirds of sales in 2021, representing a 13.8 per cent (£6.2 billion) annual increase. Meanwhile, the sale of services (£25.8 billion) accounted for the remaining third of sales, marking a 13.3 per cent (£3 billion) annual increase over the year.

­­Several of the increases in the annual growth rate of sales have been largest on record. This includes a 13.6 per cent increase (£9.2 billion) in total sales (£77.1 billion), a 13.2 per cent increase (£6.1 billion) in sales within Northern Ireland (£52.1 billion), and a 23 per cent increase exports (£1 billion) to the Republic (£5.2 billion).

Purchases/imports

In 2021, total purchases by companies located in Northern Ireland were valued at £48.7 billion, comprising the purchases of goods (£38.8 billion) and services (£9.9 billion). Purchases of goods accounted for 79.6 per cent of total purchases, representing an annual increase of (£4.6 billion). As per 2020, purchases of services represented 20.4 per cent of total purchases.

Northern Ireland represents the single largest market for the purchases of goods (50.6 per cent) and services (69.4 per cent), with a total purchase value of £26.5 billion. This is followed by Britain, representing 29.8 per cent of total purchases (£14.4 billion). Imports from the Republic, the rest of the EU, and the rest of the world represented a combined 15.8 per cent of total purchases (£7.7 billion).

Trade balance

Trade balance is defined by the difference between the value of sales/exports and purchases/imports. A trade surplus exists when sales/exports exceed purchases/imports (referred to as a positive trade balance), and a trade deficit exists when the inverse is true (referred to as a negative trade balance).
In 2021, Northern Ireland exported more goods and services than it imported. In relation to the overall balance of trade, exports of goods and services (£12.2 billion) exceeded imports of goods and services (£7.7 billion), resulting in a £4.5 billion trade surplus (otherwise known as a positive trade balance).

Taken in isolation, the export of goods (£9.2 billion) relative to the import of goods (£6.8 billion) resulted in a surplus of £2.4 billion, while the export of services (£3.0 billion) relative to the import of services (£0.9 billion) resulted in a surplus of £2.0 billion.

However, a deficit exists in the balance of trade between Northern Ireland and Britain. The total value of goods and services sold to Britain (£12.8 billion) was exceeded by the total value of goods and services purchased from Britain (£14.4 billion), resulting in a £1.7 billion trade deficit. This deficit has narrowed relative to 2020 (£2.3 billion).

Conclusion

Aside from 2016 and 2020, Northern Ireland’s total sales have consistently experienced annual growth and, until 2020, never recorded an annual decrease. The decrease in 2016 was primarily a result of the first recorded decrease in sales to Britain. This trend continued in 2017, though at a reduced rate, before returning to positive growth in 2018. In fact, in 2019, sales to Britain marked the only recorded sales growth that year. Exports, however, have been consistently more erratic.

NISRA acknowledges that the increased value of sales and exports simply mirrors, to some extent, the strong post-Covid economic recovery following reduced trade in 2020. As a result of the Covid-19 pandemic and the associated public health restrictions, there was a downturn in total sales in 2020 with the impact being felt by every destination aside from Britain.

The NIETS asserts: “When the figures are viewed in the broader picture of trends observed over the past number of years, the 2021 figures broadly align with what might reasonably have been expected were it not for the impact of the pandemic in 2020.”

Similarly, the figures have not been adjusted to account for inflation.

One year after the implementation of the Northern Ireland Protocol (NIP) in January 2021, contrary to assertions that it “has damaged the Northern Ireland economy”, NISRA figures indicate a 13.2 per cent increase (£6.1 billion) in sales within Northern Ireland, a 14.5 per cent increase (£3.2 billion) in external sales in 2021, a 23 per cent increase (£1 billion) in exports to the Republic, and a 13.6 per cent increase (£9.2 billion) in total sales.

Indeed, while the DUP projected “barriers to trade have been created with our largest market [Britain], inevitably leading to devastating consequences”, the value of Northern Ireland sales to Britain in 2021 increased by 13.1 per cent (£1.5 billion) to £12.8 billion.