Exports from Northern Ireland to the Republic have fallen by nearly 20% in a year, increasing the pressure on local firms to look elsewhere for business.
Figures from the Department of Finance and Personnel revealed export sales to our closest neighbour were down £229m to £1.2bn in the financial year 2010 to 2011 — a fall of 19%.
The slump has pushed levels of north-south traffic of products from machinery and equipment to food down to 2004 levels.
With the Republic this week facing its fifth austerity budget in two years and a drive to cut €1bn from public spending, worse may be ahead.
Total manufacturing sales in Northern Ireland to businesses here, as well as in the Republic, Great Britain and abroad, were down 1.1% to £15.9bn in “real terms” — ie taking away currency fluctuations and inflation.
Sales to Great Britain alone were up 4.4% to £7.3bn.
External sales — to areas outside Northern Ireland — increased by 2.3% (£282m) to £12.4bn. But export sales were down 0.6% to £5.1bn.
But exports grew in machinery and equipment.
Fuelled by the success of big players like Larne-based generator maker FG Wilson, machinery
and equipment sales to abroad grew 32.5% to £571m.
Food and drink grew 1.7% to £6.6bn in external sales but fell nearly 4% to £995m in exports.
Electronics and fabricated metal were two sectors where external sales fell steeply. Exports in computers fell nearly 10% and fabricated metal 30%.
While the statistics do not show which sectors bore the brunt of the fall in demand from the Republic, its continued property slowdown will have contributed to a 44% fall in demand for furniture.
Bryan Gray, chief executive of industry body Manufacturing Northern Ireland, said: “Unfortunately the unsettled financial situation in the Eurozone, and particularly in the Republic of Ireland, has hampered progress for many companies.
“SMEs in particular have in the past depended on markets within Ireland, and have limited resources to access new markets.”
He added: “It’s encouraging to see machinery and equipment growing their markets after a major decline, although computers and electronics are suffering as a result of the worldwide recession.”
Ulster Bank chief economist Richard Ramsey said the figures show “significant changes” since an export peak four years ago. Since then, nearly two-thirds of growth in the five years to 2007/08, had been lost.