Brexit bureaucracy hit Irish supply chains harder than the Covid pandemic

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More than half of Ireland’s larger companies are facing an increased regulatory burden due to Brexit, but the UK remains the most popular external location for sourcing goods and services among Irish companies.

A Central Statistics Office (CSO) study of Ireland’s engagement in global value chains found that more companies here buy from abroad than supply goods for export. The report focused on relatively larger companies with 50 or more employees and focused on 2020.

It has also been noted that the increase in red tape as a result of the UK’s exit from the European Union and the single market continues to have a greater negative impact on businesses here than the supply chain disruptions associated with the Covid pandemic.

Research found that 54 per cent of Irish companies said Brexit had resulted in a greater regulatory burden, compared with two in five who reported difficulties sourcing raw materials or intermediate products from suppliers abroad due to the pandemic.

Key Brexit impacts included greater difficulties in sourcing materials or products from UK suppliers and difficulties in transporting UK manufactured goods.

Despite Brexit, Great Britain remained the most popular location for the companies surveyed, both for global purchasing and for the delivery of goods/materials and services.

Commenting on the publication, Colin Hanley, a statistician in the CSO’s Business Statistics Division, said that raw materials, machinery and other technical equipment are the most commonly purchased overseas items, while IT services are the most commonly purchased overseas services.

Almost half (47 percent) of the companies surveyed have purchased goods/materials abroad for use in their own production, while 24 percent have supplied goods or materials to customers abroad. More than a third (35 percent) purchased services abroad, while 22 percent provided services to a client abroad.

Manufacturing is the most dependent on imports, with more than nine in ten companies sourcing materials from abroad and also the most likely to source services from abroad.

Among all companies entering cross-border supply chains, the UK is the largest single supplier. Almost four in ten companies (37%) bought goods from the UK in 2020, while 35% bought from other parts of the European Union.

The trend for procurement services was similar, with the UK being the largest single market – used by a quarter of businesses – while the rest of the EU-27 combined was slightly behind at 24 per cent.

https://www.independent.ie/business/brexit-red-tape-hit-irish-supply-chains-harder-than-the-covid-pandemic-41898518.html Brexit bureaucracy hit Irish supply chains harder than the Covid pandemic

Fry Electronics Team

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