Northern Ireland companies adjust as export market enters choppy waters
From trade sanctions with Russia to a strengthening pound and weakening euro, Northern Ireland's exporters could be facing a difficult 12 months ahead. And while many are remaining positive about what the future holds, manufacturers across a wide array of sectors know it's going to be a year of mixed fortunes - with low oil prices bolstering consumer confidence providing one potential silver lining for companies.
But with export sales increasing by around 9% in the last year, according to the Northern Ireland Statistics and Research Agency, many firms managed to fight through 2014.
And while Northern Ireland's export targets are some way off those laid out five years ago in the Programme for Government, they remain a key part of the output of many firms in Northern Ireland.
However, one area which could soon see choppy waters is Northern Ireland's food and drink industry.
According to Ulster Bank's chief economist Richard Ramsey (right), a long-term skyrocket rise for the sector could finally come to an end this year.
"This could be the first year where we see sales suffer - the one-way traffic may finally come to an end in 2015."
That could be down to the weakness of the euro slowing sales to the Republic and the rest of Europe.
According to David Dobbin, chief executive of Dale Farm - which exported over £100m of product last year - sales outside the UK and Ireland are expected to be in decline.
"Our main exports would be to the Middle East, China and Russia. These areas which were once the best show in town, are now closer to the bottom this year," he said.
And in one case, it's understood another Northern Ireland food firm has already lost a £50,000 contract with one of the UK's big supermarkets to a competitor in the Republic as a result of the currency fluctuation.
According to Stephen Kelly of Manufacturing NI, tight margins are being squeezed with big supermarkets now pulling in supply from the Republic and the rest of Europe.
"When the euro was stronger than it is today, our suppliers had a competitive advantage, but with the exchange rate going the opposite way, it's left them pretty exposed," he said.
Meanwhile, the latest business survey has shown business recovery in Northern Ireland slowed in December - bringing 17 months of improvement to a halt.
Belfast-based Marlborough Engineering - which produces aircraft components as well as jigs and fixtures - relies on around half its sales from outside the UK and Ireland.
And it was one of the firms making the short-list in the Excellence in Exporting category at last year's Belfast Telegraph Business Awards. It employs 68 staff, with plans to recruit additional skilled engineers under way.
Around half of the company's business is through export - with the US making up as much as of 70% of sales outside of the UK and Ireland.
And despite an ever-strengthening US dollar in the last six months, sales manager Alistair Bann said the company had managed to avoid the price spike effecting its export sales.
"Business is always tough and you always have competition. But we have had another successful year, and have grown once again," he said.
And while some firms are feeling the strain of currency fluctuations, a shrinking market in China and trade sanctions with nations including Russia, Mr Bann remains optimistic for the year ahead.
"Expectations are very good, with potential business coming in through both current and new customers."
Meanwhile, other manufacturers - including last year's big winner at the Business Awards, AJ Power - have spread their export sales across a wide variety of markets, helping to avoid any impact on one particular area.
The firm - which exports diesel generators and control units across the globe - relies on export making up more than 80% of its total business.
The Craigavon company currently sells to markets in South America and Africa as well as Northern Europe and the Middle East.
"Last year, from a market perspective, it was very stiff and it was down. But we grew as a company - expanding by about 18%," managing director Ashley Pigott said.
"But currencies are very critical and you need a competitive sterling base. We have gone in a full swing and it's a nightmare for management.
"For example in Europe, our business has been fine, but we have witnessed a squeeze on margins."
And the firm's business with Russia is "almost non-existent now" as a result of trade sanctions.
Manufacturing export sales still lag behind optimistic government predictions made five years ago.
In 2010 the Programme for Government set a target of 20% growth in manufacturing exports.
But in November it was revealed exports within the remit of Invest NI had risen by just 6%.
Meanwhile, latest figures show the UK's trade deficit fell to a 17-month low in November - which was helped along by cheaper oil.
The shortfall between exports and imports narrowed to £1.4bn from £2.2bn the previous month, the smallest since June 2013.
And it's hoped the massive drop in oil prices will help fuel additional spending throughout this year.
"There is some hope for an improvement in export sales in 2015 as low oil prices and low inflation should boost spending power in many oil importing countries," Danske Bank's chief economist Angela McGowan (left) said.
"Europe in particular will benefit from the lower oil price, which is forecast to remain low for the first half of 2015."
The closing date for entry submissions is noon on March 19, 2015. The gala awards dinner will take place on Thursday, April 30 2015 at the Culloden Hotel. A table of 10 is £900 plus VAT and individual places are £100 plus VAT. For further info contact Sarah Weir (JPR) on email@example.com or call 028 9076 0066 or visit belfasttelegraph.co.uk/business-awards/enter