Ireland’s booming construction industry continues to increase its imports from the UK but the pace of growth is easing, according to the analysis by the foreign exchange specialist.
Spending has risen by 128% over the past three years, but increased by a more modest 17% in the past 12 months.
The analysis of more than 4,000 transactions 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 €4,902 to €5,269. The average purchase size is now two thirds bigger (66.8%) than the €3,159 recorded in the 12 months prior to February 2017.
David Lamb, head of dealing at Fexco Corporate Payments, said: “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 investigate 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 referendum, making British imports an attractive way to mitigate the cost pressure of rising wage bills at home.”