2024 Outlook: Navigating the Challenges for Irish Exporters

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Irish exporters are facing several challenges in 2024, shaped by both domestic and international factors:

Global Economic Conditions: The global economic landscape has affected Ireland significantly. A period of strong growth in exports and large-scale investments since 2019 is giving way to a slowdown, largely driven by global economic conditions. This change is evident in the falling goods exports, which declined by 6% and slowing investment, down by 4% in 2023. This trend of slowing growth and consolidation is expected to persist into 2024, as reflected in Ibec's analysis​​.

Inflation and Interest Rates: Inflation continues to be a significant concern, especially with the ongoing conflict in Ukraine exacerbating disruptions in food and energy markets. Inflation in Ireland was forecasted to average 7.1% in 2022, and despite the expectation of a decrease in the following years, core inflation (excluding energy and food) is projected to remain around 2.7% in 2025. This scenario is complicated further by the European Central Bank's signal to increase monetary policy rates over the coming quarters, which is likely to dampen investment sentiment and consumer spending​​.

Export Sector Weakness: The Central Bank of Ireland noted a specific weakness in exports from multinationals based in Ireland. There was a marked slowdown in the growth of exports of goods and services, with exports that had grown by 13.9% in the previous year slowing to just 0.2% growth in 2023. This slowdown is expected to continue into 2024. The decline in exports is concentrated in sectors like vaccines and semiconductors, partly due to reduced demand following the Covid-19 pandemic and trade tensions between the US and China​​.

Competitiveness Concerns: The Irish export sector, which is significantly influenced by a small number of highly globalised, multinational-dominated sectors, is showing signs of vulnerability. This concentration poses risks to the Irish economy, as demonstrated by the decline in trade in early 2023. Additionally, Ibec members have expressed growing concerns about competitiveness, especially with the government's decision to impose substantial costs through labour market taxes, entitlements, and regulations without a comprehensive strategy. These costs are expected to result in cumulative increases in labour costs of more than 25% in many firms over the next two years, potentially impacting Ireland's competitive edge in the export market​​.

In summary, Irish exporters in 2024 are navigating a challenging environment characterised by global economic downturns, inflation and higher interest rates, specific weaknesses in key export sectors, and rising concerns about national competitiveness due to government policies. These factors combined suggest a period of increased pressure and potential restructuring for Irish exporters.

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OpenVentures specialises in assisting businesses in achieving profitable growth by expanding into international markets. We offer expert support and guidance in key areas, such as marketing, export strategy& support and business development  to ensure your readiness and establish a winning strategy for a successful export journey.

Utilising our proven methodologies, we collaborate with you to evaluate your export preparedness and create and execute an effective export strategy that yields tangible results. Our aim is to steer you clear of costly mistakes, prevent you from wandering down unproductive paths, and guide you away from wrong turns.