Ulster companies feeling pinch as exports hit by strong pound
Northern Ireland's exporters are feeling the pain as the strong pound continues to cramp overseas trading here and in Britain.
According to statistics, Britain's trade deficit ballooned in July after the country's exports fell to their lowest level in four years as firms were hit by the strong pound.
The Office for National Statistics (ONS) said the export of goods fell by £2.3bn to £22.8bn in July, the lowest export figure since September 2010, led by a drop in exports of chemicals and manufactured goods.
The ONS said the goods trade deficit widened to £11.1bn from £8.5bn in June, which was more than economists had expected.
Mark Cuskeran, the managing director of SDC Trailers in Cookstown, said: "The strong pound has been an obstacle for us with our sales into the eurozone. What it's also doing is giving European exporters and manufacturers an advantage in the UK market."
The overall goods and services deficit widened to £3.4bn, four times its level in June.
The Northern Ireland Chamber of Commerce said the impact here was exacerbated by our land border with the eurozone.
Ann McGregor, chief executive of Northern Ireland Chamber of Commerce and Industry (NI Chamber) said: "These figures are entirely consistent with the findings from the NI Chamber and BDO Quarterly Economic Survey.
"While we are seeing improvements in the local economy, both manufacturers and service sector businesses are finding export markets extremely challenging. In fact, exchange rates are now on a par with competition as one of the key concerns affecting businesses here. Exchange rates are a much bigger concern for Northern Ireland businesses compared to other UK regions.
"The importance of the Republic of Ireland market both as a customer and competitor is a big factor influencing this."
Economists said this data, along with weaker-than expected manufacturing figures, represented a double blow to the economy.
Stephen Kelly, managing director of lobby group Manufacturing NI, said many manufacturers were opting to buy raw materials from euro suppliers - which was having an impact on the supply chain in Northern Ireland.
"People keep a very close eye on currency, as it makes the difference between profitability and not being profitable."
Howard Archer, chief UK and European economist at IHS Global Insight, said the deficit widening, along with disappointing manufacturing figures, were "a double whammy of bad news for the UK economy that does not bode at all well for gross domestic product growth in the third quarter".
GDP growth had been expected to moderate from 0.7% in the second quarter to 0.6% in the third quarter, "but there is now a serious risk that growth could dip to 0.5% quarter-on-quarter", he said.