NISRA and DfE Cross Border Supply Chain Report

NISRA and the Department for the Economy (DfE) published results today from their Cross-Border Supply Chain survey and analysis of Northern Ireland – Ireland trade data.

DfE commissioned NISRA to undertake a survey of Northern Ireland businesses who trade with Ireland and provide detailed analysis of HMRC trade microdata. The objective was to provide more detailed information on the frequency and value of cross border movements of goods and the extent of cross border supply chain linkages to inform EU Exit discussions.

Value and Volume of Cross-Border Trade

Provisional estimates indicate that Northern Ireland VAT and PAYE registered businesses (in the non-financial and non-farm sectors) made some 758,000 cross border export deliveries to Ireland. This was estimated to be worth some £3.4bn to the Northern Ireland economy in 2016. In addition, there were approximately 410,000 import deliveries in 2015 from Ireland to Northern Ireland businesses worth nearly £2.0bn in the sectors covered by the survey.

The majority (74%) of the (758,000) export deliveries in 2016 were made by small businesses (with fewer than 50 employees) with a third carried out by micro businesses (with fewer than 10 employees).

Much of the volume of Northern Ireland businesses’ cross-border trade was comprised of low value trips but these accounted for just less than one fifth of the total value of exports. In contrast just over 20% of Northern Ireland businesses who export to Ireland made deliveries to Ireland worth more than £4,500 per trip. Such businesses accounted for most (82%) of the value of Northern Ireland’s exports to Ireland (£3.4bn) in 2016.

Exports to Ireland accounted for more than 15% of businesses’ (Northern Ireland + Ireland) sales for five of Northern Ireland’s District Council Areas (DCAs) in 2015. On average Northern Ireland businesses located in DCAs along the Northern Ireland – Ireland border showed a greater propensity for cross border trade than NI businesses located further away from the border.

Supply Chain Activity (HMRC trade data)

Thirty nine per cent of Northern Ireland’s (above the Intrastat reporting thresholds) trade with Ireland was comprised of “intermediate” products i.e. goods that are used as inputs into the production of other goods. This provides a key indicator of the extent of North-South supply chain activity.

This figure increased to two thirds (66%) of the value of Northern Ireland’s trade with Ireland when (bilaterally traded) agri food products for final consumption such as meat and fish, foodstuffs, dairy products and beverages, most of which are transported in a time sensitive manner, are included.

On a similar basis, slightly less (62%) of Northern Ireland’s trade with the Rest of the EU also showed evidence of such supply chain activity, as did 53% of Northern Ireland’s trade with the Rest of the World. However Northern Ireland’s trade with these destinations was more heavily influenced by trade in capital goods (21%, 23% of trade respectively) than Northern Ireland’s trade with Ireland (7% of such trade).

Comments

The provisional results from NISRA’s new survey has highlighted that there were 1.2m export and import cross border business deliveries (in the non-financial and non-farm sectors) relating solely to Northern Ireland’s trade with Ireland. It is clear most of the volume of cross border trade is comprised of relatively low value transactions. However, just over a fifth of Northern Ireland businesses accounted for over 80% of the value of exports.

These movements only refer to trade by Northern Ireland businesses registered with HMRC for VAT purposes and therefore exclude some 58,500 small traders or self-employed who fall below the turnover threshold for VAT.

Accompanying analysis of HMRC trade micro data also shows that two-thirds of Northern Ireland’s trade with Ireland relates to goods that could be considered part of a cross border supply chain. This includes both goods crossing the border as inputs used to produce other goods to delivering and the delivery of foods to wholesalers and retailers in a time sensitive manner. There are also significant local supply chain linkages with the Rest of the EU and the Rest of the World.

The new survey and analysis paint a rich picture of the web of cross-border connections and trade between Northern Ireland businesses and businesses and consumers in Ireland. This is, however, only a partial picture of the movement of goods across the border, as Northern Ireland relies heavily on moving and receiving goods through ports in Ireland for its trade with Great Britain. Previous estimates have indicated that Northern Ireland sales of goods to Great Britain are worth nearly four times that of sales of goods to Ireland of which the current exercise does not take account. North-South supply chains cannot be considered in isolation from trade with Great Britain and this remains an area for further research.

However, the current report provides greater detail than previously available on the incidence and purpose of cross border movement of goods between Northern Ireland and Ireland to inform EU Exit.

Notes to editors: 

1. The detailed statistical bulletin is available on the NISRA website.

2. Further EU Exit related analyses are also available at the above link.

3. Intrastat Thresholds: A UK business is only required to submit detailed "Intrastat" product information to HMRC if the total value of exports to the EU is worth more than £250,000 per year. Similarly, businesses only provide detailed "Intrastat" product information to HMRC if the total value of their imports from the EU as a whole is worth more than £1.5m per year. These are known as "Intrastat reporting thresholds". Otherwise businesses report the total value of exports and imports by destination and origin to HMRC (but without detailed product information). The detailed product analysis referred to throughout the report is therefore only possible for those Northern Ireland businesses whose exports and imports are above the respective Intrastat reporting thresholds. However, the detailed "Intrastat" product information analysed in the report accounted for nearly 90% of the value Northern Ireland’s exports to Ireland and 42% of the value of Northern Ireland’s imports in 2015. Other analyses of HMRC data referred to in the report include the total value of Northern Ireland exports and imports to/from Ireland and other markets (i.e. taking account of the value of trade both above and below Intrastat reporting thresholds).

3. For media enquiries, please contact DfE Press Office on 028 9052 9604. Outside office hours, please contact the Duty Press Officer via pager number 07623 974 383 and your call will be returned.

4. Feedback is welcomed and should be addressed to: Responsible statisticians: Dr. James Gillan, Dr. Catherine Lynn or Patrick O’Kane Economic & Labour Market Statistics Branch (ELMS), james.gillan@nisra.gov.uk; catherine.lynn@nisra.gov.uk; patrick.o’kane@nisra.gov.uk or Tel: 028 90529359.

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