One year on, businesses still suffering a Brexit fall-out

NI Chamber chief executive Ann McGregor with Steve Harper, executive director of international business at Invest NI. Picture: Matt Mackey/PressEye
Gary McDonald Business Editor

NEARLY a year since the end of the Brexit transition period, businesses in Northern Ireland say disruption from the new trading arrangements and higher costs are placing them at a competitive disadvantage.

A survey of more than 100 export-focused firms (a third of them in manufacturing), conducted by the NI Chamber of Commerce and Invest NI, found that 84 per cent are dealing with higher costs while 89 per cent say it's taking longer to transport goods to or from overseas.

But it also points to the potentially huge benefits of dual-market access, with companies here having more scope to grow both domestically and internationally than their counterparts in Britain.

The “Brexit One Year On” international trade report found that nine in 10 firms in the north have experienced supply chain issues, including rising shipping costs (77 per cent), delivery delays (77 per cent) and problems with product availability (72 per cent).

Two in three have experienced increased paperwork (65 per cent), while two in five have experienced HGV driver shortages.

And Northern Ireland businesses have also reported higher shipping container costs compared to other UK based traders.

According to the survey, most businesses (85 per cent) have evaluated their supply chain risk.

Two in three have conducted procurement due diligence and a similar share have diversified suppliers to minimise risk.

Some 59 per cent have changed supply routes and almost one in four have brought some or all of their supply chain back to Northern Ireland suppliers.

Regarding growth and investment, the survey findings indicate that Northern Ireland companies have much more concrete plans to grow both domestically and internationally, when compared to the UK average (42 per cent v 17 per cent)

NI Chamber chief executive Ann McGregor said: “The last 12 months have brought substantive changes for exporters and this report brings into sharp focus the serious issues they are facing with regards to supply chain difficulties and additional paper-work. Issues with additional red-tape must be resolved and NI Chamber continues to work closely with the NI Executive, UK and EU negotiators on this issue.

“Northern Ireland is not alone in facing trade disruption from the new trading arrangements. Many UK businesses are facing similar constraints, particularly in terms of transport delays. However, the findings suggest that the cost pressures that have been placed on local businesses are more acute, which potentially places them at a competitive disadvantage.

“There is a lack of awareness from UK businesses about the Protocol. This highlights the need for education of GB businesses to support how they trade with their Northern Ireland counterparts. There is also a general need to raise awareness and engage much more proactively with businesses in Northern Ireland around all aspects of world trade agreements.

“Despite the significant challenges, this report is further illustration of the potentially huge benefits of dual-market access. Northern Ireland companies have much more concrete plans to grow both domestically and internationally, compared to the UK average.

“One of the biggest challenges to realising the potential benefits is uncertainty around the Northern Ireland Protocol – businesses cannot trade with uncertainty. Our exporters need clarity around the Protocol, less paperwork to trade and better access to skills.

“If policy makers can resolve these issues quickly and in partnership with business, Northern Ireland finds itself at the starting blocks of a unique opportunity at a time when we really need it.”

Steve Harper, Invest NI's executive director of international business added: “We are very aware of the many challenges Northern Ireland businesses have faced over the last year and we've been working in partnership with businesses to help overcome these challenges. At the forefront of this has been increasing both our communication with businesses and our support.

“It is encouraging to see that knowledge of the many issues of EU Exit is higher within the Northern Ireland business community than in the rest of the UK. Many businesses have already demonstrated that they can adapt and have successfully won new business globally and many have shortened supply chains to ease the pressures.

“We want to continue to help NI exporters to grow globally. I would encourage those already exporting and potential exporters to engage with Invest NI so we can provide the support needed to overcome the challenges and ensure we are well positioned to seize the opportunities ahead to drive growth and prosperity in Northern Ireland.”

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