Saturday, January 22, 2022

European countries and exporting champions

Lithuania has the highest rate of two-way traders; Ireland among lowest

International goods trading is dominated by importers who just only import. In 2019, almost two-thirds of the EU firms were importers only. Domestic firms accounted for the majority of exports while foreign-controlled firms accounted for the majority of imports in the EU in 2019.

According to Eurostat two-way traders (who are importers and exporters) accounted for 24.0% with the remaining 10.6% who were only exporters.

Eurostat says the island nations of Malta (17.0%, 2018 data), Ireland (16.2%) and Cyprus (12.1%) recorded the lowest proportions of two-way traders, as around four-fifths of their enterprises engaged in trade were importers only. The highest share of exporters only was found in France (32.0%) — think of for example wine where it does not require significant foreign inputs.

Ireland's importers accounted for 79% of traders in 2019.

In 2019 Denmark had the greatest ratio of exports made by domestic firms at 68.6%, followed by France at 68.4% and Germany at 63.2% — there are no data for Ireland.

Micro firms, with up to 9 employees typically account for a significant number of exporting firms, while big firms with much smaller numbers dominate the value of exports.

Some 63% of Irish exporting firms are micro-enterprises while Eurostat says the top 1,000 enterprises in Italy (49.0%), accounted for almost half of the total value of exports. In Germany (66.6%), Poland (67.3%, 2018 data) and Spain (67.3%), large firms account for approximately two-thirds of the total value of exports.

Germany had merchandise goods trade with 237 countries and territories in 2018 encompassing every region of the world — with partners that were large, small and tiny. There were trade surpluses with 167 and deficits with 70 partners.

In Europe, Ireland and Greece have low export ratios and also low large firm numbers.

IDA Ireland — the State's inward investment agency — annually supports about 1,600 foreign firms that export merchandise and services from Ireland.

In 2019 the Organisation for Economic Cooperation and Development (OECD) in a report 'SME and Entrepreneurship Policy in Ireland' highlighted the low rates of small and medium firm exporters in Ireland and Greece.

As detailed above Ireland's two-way trader ratio is very low according to Eurostat.

The combined total of large firms in France, Spain and Italy, have a margin of about 1,000 above Germany's 7,250 firms.

Irish-owned firms export about €6bn annually to the 18 other member countries of the Eurozone. The population of this market is 338m and it has had currency stability for 20 years. An important factor in the poor Irish performance is the shortage of exporters.

In related developments, Irish-owned digital economy firms accounted for 1.4% of total jobs in December 2020 while the foreign-owned firm rate was 5%. The important category 'Computer Programming' had only 1,900 employees in Irish-owned firms while there were 38,000 employed by overseas firms. Simply, most Irish tech firms do not engage in writing, modifying, testing and supporting software.

Research and development business spending is dominated by foreign firms while the Irish portion includes foreign firms that have become Irish for tax purposes, according to the Central Statistics Office.

The OECD reports that Irish and Belgian employer firms (with at least one employee) have the lowest annual firm birth rates.

Denmark, a comparator country for Ireland, is a world leader in wind energy but it also has the world's 3rd biggest food cluster (companies employing 200,000 people). It hosts the world’s 2nd largest meat exporter, the 6th largest dairy company and the 4th largest brewery. Dutch-based beer brand Heineken is No. 1 in Europe.

Eurostat data show that the Dutch exported 1.9bn litres of beer containing alcohol in 2020, accounting for 21% of total (intra- and extra-EU) EU beer exports. Belgium had a second rank (1.7bn litres; 19%) and Germany (1.5bn litres; 17%), followed by France and Czechia (both 0.5bn litres; 6%) as well as Ireland and Poland (both 0.4bn litres; 5%).