Shoppers crossing the border to buy goods in Northern Ireland have spent an estimated €418m over the past 12 months. That is up €33m year-on-year, according to a new report by EY. EY's latest Economic Eye - an all island analysis - points to further divergence between the two economies with the Republic likely to post growth of 4.9% this year compared to 1.4% in the North. EY predicts 144,000 jobs will be created in Ireland between 2017 and 2020 but just 5,800 of these will be in Northern Ireland, it says.
Neil Gibson, chief economist at EY Ireland, said that while it would be unwise to rule anything out as regards Brexit, the likelihood of a cliff-edge departure is fading. Neil Gibson said the the hard work starts now with the start of the second phase of negotiations and he predicts some "tough days" ahead. He said that hopefully the movement to the next stage of negotiations means that we will see 2018 really focus on working towards a free trade agreement, which would be in the interests of both economies on the island of Ireland.
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The EY Economic Eye looks at retail between the two economies and it revealed a significant flow in cross border retail, fuelled mainly by the shift in the exchange rate. Over €400m is expected in cross border retail sales and while not quite the peak levels seen in 2008 and 2009, Mr Gibson said that that would have led to a lot of column inches in previous years but because the Irish economy is growing so stronger, that level of 'leakage' can be afforded. The Northern Ireland economy is struggling a little bit and so the extra trade from the Republic is a timely boost for Northern retailers, he added.
Mr Gibson said the two economies on each side of the border are on very different trajectories - the economy in the Republic of Ireland is growing very strongly as consumers spend, the Government is spending a little and businesses are spending. All three legs of the Irish economic stool are solid, he stated. But compare that to the North were people are seeing real pay cuts due to rising inflation, no executive government in Stormont and nervous businesses.
But jobs growth on both sides of the border is still predicted, which Mr Gibson said is encouraging. He said that while the level of jobs growth in the Republic is hugely impressive, it does lead to the spectre of talent shortages. He said EY's clients are seeing a real battle to get their hands on the talent needed to grow their businesses.
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