Please note: we have posted a new version of this blog article using the most recent HMRC annual trade data, see here.
This blog post uses the most recent annual data from the HM Revenue and Customs’ (HMRC) Regional Trade Statistics [Download: Excel file] to provide an overview of Northern Ireland’s (NI) current position with regard to trade in goods. This updates our previous blog post on NI’s trade in goods in 2016. This year’s edition adds new elements of analysis by examining imports and NI’s balance of trade with the European Union.
It should be noted that HMRC’s trade statistics for 2017 remain provisional and are subject to change. Additionally HRMC’s statistics only cover goods. Services are not included. The data also only refer to exports from NI (i.e. sales from NI which are destined for markets outside of the United Kingdom (UK)). ‘External sales’, which are defined as sales outside of the NI, but within the UK (i.e. NI sales to Great Britain (GB)) are not included. For estimates of both services exports and sales to GB readers may wish to refer to the Northern Ireland Statistic and Research Agency’s Broad Economy Sales and Exports publication.
Growing NI’s export base has long been a key pillar of the Executive’s Economic Strategy. The Executive’s 2012 Economic Strategy’s ‘path to competiveness’ was predicated on ‘a larger and more export-driven private sector’, leading to increased employment and wealth.
In March 2016, the Department for the Economy (DfE) published ‘Export Matters’, an action plan aimed at increasing the value of exports and external sales outside of NI by 80% by 2025.
Most recently, the DfE released ‘Economy 2030 – draft industrial strategy’. This too had a global focus, prioritising ‘succeeding in global markets’ among its pillars for growth. Underpinning this desire to succeed in global markets is a drive to increase the ‘value of sales by local businesses made outside NI’.
Trade performance
In 2017, NI goods exports were valued at £8.55 billion (bn). This represented an increase of 9.3% on the previous year when exports were valued £7.83bn. As can be seen from the infographic above, NI’s exports grew each year from to 2014 to 2017.
Imports have also shown annual growth since 2014. The latest data shows that imports were valued at £7.44bn in 2017, an increase of 7.7% on 2016.
The EU, as a trade bloc, has consistently been the destination for the largest proportion of NI’s good exports by value over the 2014 to 2017 period. In 2017, NI’s exports to the EU were valued at £4.81bn, or 56% of total exports. In comparison, exports to the Rest of the World were valued at £3.47bn, or 44% of total exports. Both EU and non-EU exports saw year-on-year growth in 2017. EU exports grew by 15% in this period, whereas non-EU grew by 2.6%.
EU balance of trade
Based on the most recent data from HMRC, NI sold a greater value of goods to the EU than it bought from the EU in 2017. This ensured that NI had a small trade surplus of £10 million. This reversed the recent trend for NI’s balance of trade to be in deficit with the EU. In each of the previous three years examined, NI sold more by value to the EU than it purchased from it (see infographic above).
According to the latest HMRC data, NI’s trade deficit with the EU was valued at £134m in 2013, £241m in 2014, and £122m in 2015.
Key markets and commodity groups
The EU as a trade bloc is the destination for more than half of NI’s goods exports. On a country by country basis, however, the Republic of Ireland (RoI) remains our key export partner. In 2017, goods exports to the RoI were valued at £2.7bn, equivalent to 31% of total goods exports value and approximately 56% of the value of goods exported to the EU. The United States (US) was NI’s second most significant export partner in the same year. Goods exports to the US were valued at £157bn in 2017, equivalent to 17% of total exports, and 40% of non-EU exports (see Figure 2). It is important to note too, exports to the US saw significant year-on-year growth of 41% between 2015 and 2016. This growth did not continue into 2017, with exports to the US shrinking by 15.7% year-on-year between 2016 and 2017.
The export market showing the greatest level of growth between 2016 and 2017 was Canada. Exports to Canada grew by 32.9% over the year, moving Canada from NI’s fifth largest to exports market in 2016 to its third largest in 2017.
Machinery and transport equipment continued to NI’s number one export commodity group in 2017. Exports of this type were valued at £2.88 billion, or 33.7% of total goods export value.
Conclusion
HMRC’s data on regional trade shows that NI exports continued to grow during 2017. Overall exports grew by 9.3% from 2016 levels. This is lower than the rate of annual growth experienced during 2016, when exports grew by 12% on the previous year. The largest proportion of these exports (56%) went to the EU, with the RoI continuing to be the most important single country destination for NI exports (31% of total exports in 2016). The data shows the US to be the second largest single country destination for NI exports (17% of total exports in 2016). Imports also continued to grow during 2017.
Significantly, NI’s balance of trade with the EU moved from deficit to a small surplus in 2017. This means NI now sells more to the EU than it purchases from it.