Postive exchange rate drives export growth

Total sales and exports by manufacturing companies in Northern Ireland increased from 2007/08 to 2008/2009, however, the growth rate was slower than in previous years.

The latest figures from the Northern Ireland Manufacturing Sales and Exports survey estimated sales by manufacturing companies to be worth £16.2billion in 2008/09, an increase of 4.6% (£709 million) in cash prices over the year. This was a marginally slower rate of growth than that reported for the previous period (2006/07-2007/08), when growth was 5.0%.

Exports continued to represent a vital income for the Northern Ireland economy, with over a third of all sales (36.3%) made by Manufacturing businesses generated from international customers. The value of Exports increased over the year by 8.2% (£446million) in current prices to £5.9billion. This is the same rate of growth experienced in the previous annual period.

The Republic of Ireland remains the single most important export destination for Northern Ireland manufacturing businesses and accounted for 28.6% (£1.7billion) of all export sales. Growth in exports to the Republic of Ireland over the year (2.3%) was at a much slower rate than in the previous year (9.3%).

Sales to Great Britain accounted for two fifths (40.6%) of total sales with growth of 6.2% (£383million) over the year in current prices, to £6.6billion (from 0.3% growth in the previous inter year period). Sales outside the UK and Republic of Ireland were worth £4.2billion in 2008/09, reflecting growth of 10.8% (£409million). Of this, sales to the rest of the EU (i.e. excluding the Republic of Ireland) increased by 16.0% (£216million). This was a higher rate of growth than in 2006/07-2007/08, when sales increased by 9.9% (£121million).

The increase in the value of Northern Ireland exports has also been affected by changes in the exchange rate over the period. It is therefore also of interest to assess the value of exports in real terms, i.e. when the impact of such changes and price changes due to inflation have been removed.

In real terms, total sales decreased by 3.7%, sales to Great Britain decreased by 0.3%, exports decreased by 3.8% and sales to the Republic of Ireland decreased by 9.0%. However, sales to the Rest of European Union increased by 3.1% in real terms in 2007/08 – 2008/09.

Exports growth was most marked in the “Food, Drink & Tobacco’ sector, which contributed an increase of £130million (14.4%) to exports last year in real terms compared to 2007/08. Exports decreased most in the “Other Non-Metallic Mineral Products” sector, with a fall in real terms of £98million (39.9%) reported over the year.

Commenting on the figures, Enterprise Minister Arlene Foster said: “I welcome the 8% increase in the cash value of Northern Ireland’s manufacturing exports last year. This shows that the sector has continued to make progress despite the fall in global demand. It is clear that the favourable exchange rate has been important in offsetting some of the worst effects of the recession in Northern Ireland.

“The positive exchange rate has made Northern Ireland exports more competitive but in real terms we are continuing to face difficulties in the sector. Other indicators confirm that this has been a challenging time for manufacturing growth with both output and employment showing a decline over the year.

“Nevertheless, the favourable exchange rates represent an opportunity for exporters to take advantage of the potential to grow market share. This is a good time to build our competitive capacity. I would urge businesses to seek opportunities to increase productivity to position themselves for recovery when it comes.

“The figures show that Northern Ireland Manufacturing businesses continue to face the challenges of trading in the global market place by developing the focus of export activity and meeting customer needs. I commend the manufacturing businesses that have been proactively changing strategies and work processes to become more efficient and competitive to meet customer needs in these challenging times.”

Notes to editors:

1. The change in manufacturing sales over the year occurred in the context of a 6.0% decrease (seasonally adjusted) over the year in Manufacturing Employee jobs (Mar 08 to Mar 09), as shown by the DETI Quarterly Employment Survey. The Manufacturing Index fell by 2.1% in real terms between 2007/08 and 2008/09 as shown by the DETI Index of Production published 14 October 2009.
2. General information can be obtained from Damian Buchanan, DETI Statistics Research Branch, on tel: 028 9052 9648 and detailed statistical information is available on  http://www.statistics.detini.gov.uk
3. Media enquiries to DETI Press Office on 028 9052 9604 or email: pressoffice@detini.gov.uk Out of office hours please contact the Duty Press Officer via pager number 07699 715 440 and your call will be returned.