2019 Irish Enterprise Awards

EU BUSINESS NEWS / 2019 Irish Enterprise Awards 49 , Irish Import Boom Irish Import Boom Cools As British Builders Stagnate Irish construction firms’ surging demand for UK imports has eased, according to new data released by Fexco Corporate Payments. of the 95% jump seen between the twelve months prior to February 2017 and the following year. Though the import boom is cooling, the Irish construction industry remains bullish. A recent survey of Irish building firms by the building consultancy Aecom found more than three quarters expect their business to grow in 2019, and forecast that total output would increase by 20% over the year. By contrast the UK construction industry is stagnating. British government statistics show sector output rose by just 0.7% in 2018, the slowest pace for six years. Sentiment is fragile too, and in February a closely watched barometer of UK construction sentiment, the Purchasing Managers’ Index, plunged to its first contraction in almost a year. Speaking ahead of Thursday’s National Construction Summit in Dublin, David Lamb, head of dealing at Fexco Corporate Pay- ments, commented: “The cooling of Irish builders’ appetite for UK imports is likely to be driven by two factors; a modest strengthening of sterling – which has risen by 4% against the Euro since the start of 2019 – and a greater willingness to import materials from other EU countries. “If Britain leaves the EU without a trade deal, Irish imports of construction materials from the UK would be subject to WTO tariffs of up to 6%, so clearly it makes sense to investi- gate alternative supply chains. “However the UK’s proximity and the ease of buying from British suppliers means it remains the number one source of imports for Ireland’s booming construction industry. “Even with sterling’s rally this year, a Euro is still worth 11% more against the Pound than it was on the eve of the UK’s Brexit referen- dum, making British imports an attractive way to mitigate the cost pressure of rising wage bills at home. “With the UK Parliament taking a series of votes this week that will determine the course of Brexit, the exchange rate is likely to face extreme volatility, so Irish builders who import regularly from Britain should consider locking in the current favourable exchange rate by using a forward contract.” Ireland’s booming construction industry continues to ramp up imports from the UK but the pace of growth is easing, according to data published by the foreign exchange specialist Fexco Corporate Payments. The analysis, of more than 4,000 trans- actions made through Fexco Corporate Payments, shows that in the 12 months to February this year Irish building firms spent 17% more on UK goods and services than they did in the previous year. The number of transactions made increased by 7% and the average transaction size rose by 7.5%, from €4902 to €5269. The aver- age purchase size is now two thirds bigger (66.8%) than the €3159 recorded in the 12 months prior to February 2017. While Irish builders continue to spend more, and more frequently, on imports from the UK, the spike in spending seen in the aftermath of the UK’s 2016 Brexit vote has eased. Total spending has risen by 128% in the past three years, but the 17% uptick recorded in the last year is less than a fifth of the scale “If Britain leaves the EU without a trade deal, Irish imports of construction materials from the UK would be subject to WTO tariffs of up to 6%, so clearly it makes sense to investigate alternative supply chains."