The latest official data on trade enable us to say a bit more about the state of health of the Northern Ireland economy including the extent to which the post-Brexit trading arrangements are impacting on the pattern of trade. The statistical agency NISRA published new data on 11 March 2026, and have kindly provided some additional data considering changes in trade at a more detailed sectoral level. Importantly, we have data for four years- 2021-4 which enables us to consider what has happened to trade during the period of operation of the Protocol and Windsor Framework which started in January 2021.
Unlike GB, Northern Ireland has retained membership of the EU’s Single Market and Customs Union under the NI Protocol/Windsor Framework. At the same time, various trade frictions associated with the so-called “Irish Sea border”, imply that it has become harder to import goods from GB to Northern Ireland.
Many commentators, and politicians, claim that this position of continued de facto membership of the EU should be highly advantageous to the Northern Ireland economy. Such commentators have much less willing to recognise the evidence that increasing trade integration with the Republic of Ireland and the rest of the EU has been accompanied by weakening of Northern Ireland’s trading relationship with the rest of the UK.
The Northern Ireland economy’s total sales (goods and services) grew by 7.5% in 2024. Of course, a major part of that was caused by inflation but much of that growth would have been real or volume growth. That is good news for jobs and living standards.
Just as interesting as the total performance and perhaps also disturbing is how the pattern of Northern Ireland’s trade shifted in 2024. In 2024 Northern Ireland’s sales of goods to GB (its largest market for goods outside of the Northern Ireland region) grew by 0.8% whereas sales of goods to the Republic of Ireland grew by more than a fifth (22%). Sales to the rest of the EU (i.e. beyond the Republic of Ireland) also went up by almost 22% as well. Those who would trumpet Northern Ireland’s alleged great advantages under the Dual Market Access aspects of the Windsor Framework/Protocol, that we are allegedly a full part of both the UK’s internal market and the EU’s Single Market, are probably going to claim the great growth in sales all-Ireland and to the rest of the EU is a consequence of such Dual Market Access. But if they claim that they must also explain why sales to GB grew so poorly. By less than one per cent in 2024 which almost certainly implies a volume decline once inflation is allowed for.
When it comes to purchases of goods coming into Northern Ireland it may be notable that 2024 saw a divergence in terms of trade flows relating to GB and those relating to the Republic of Ireland. Both declined, by -6.7% and -3.1% respectively. It may be significant that the greatest decline was in terms of the trade coming from GB to Northern Ireland which is precisely the trade flow impacted by the Irish Sea border. It is entirely plausible to the extent that households and businesses now find that the frictions associated with the Windsor Framework imply higher costs that they will switch to use suppliers in the Republic of Ireland or the rest of the EU.
The official data therefore hint at trade diversion: the Northern Ireland-GB trade connection shrinking relatively at the expense of the Northern Ireland-Republic of Ireland one. Even stronger indications of such trade diversion are presented when we put the 11th March NISRA data into a longer run perspective.
If we use the NISRA Northern Ireland Economic Trade Statistics database for the entire 2019-2024 period (the Protocol kicked in from January 2021 and 2019 is used as the base year to avoid any potential Covid-related distortion in 2020) then we see that during that period Northern Ireland’s purchases of goods from GB increased by 16.2% but those coming from the Republic of Ireland grew by 27.5%. Cross-border trade was growing almost three-quarters more rapidly cross-Irish Sea trade. It is unlikely some sort of difference in product inflation rates could explain gaps of this magnitude. Once again, this looks like trade diversion.
Another way to test the data would be to try to consider how trade patterns varied at the level of individual sectors. Of the big increase of about £4.4bn in the total value of goods sold from Northern Ireland to the Republic of Ireland comparing 2019 with 2024, about £600m of that increase happened in the manufacture of food products and there was also an increase of about £600m in terms of the sale of used cars. A further £550m of increase occurred in retail and an even bigger increase of £1.3bn in the wholesale trade.
A major driver of increased economic integration between Northern Ireland and Republic of Ireland has been food processing. When we use the more detailed data supplied by NISRA we can see that Northern Ireland purchases of goods from the Republic of Ireland by the manufacture of food products sector increased by about £393m between 2019 and 2024.[i] To put that into context the During 2019-24 at the level of the entire Northern Ireland economy total purchase of goods from the Republic of Ireland increased by £683.4m. The manufacture of food products sector could therefore account for about three-fifths of that increase. Much of this reflects the high degree of integration in the dairy industry where products can cross the border several times in their journey from farm to consumer.
Comparing 2019 to 2024 Northern Ireland’s sales of goods (probably mainly used cars) from the NI vehicle distribution sector increased substantially from £177m to £795m. In both years the sales from Northern Ireland to the Republic of Ireland were substantially higher than those going in the opposite direction: over three times higher in 2019 growing to almost ten times higher in 2024
Some conclusions might be drawn from these data and some of these are relevant to policy:
First, over the 2019-24 period Northern Ireland’s purchase of goods from the Republic of Ireland grew much more substantially than the purchases from GB. This may be indicative of trade diversion as a result of the post-Brexit trading arrangements. If the pre-Protocol/Windsor Framework situation (i.e. pre-2021) represented an approximation to cost minimisation on the part of Northern Ireland consumers and businesses then whatever outcome has now been produced through trade diversion probably implies costs have increased. This would be an undesirable outcome.
Second, this differential growth in favour of trading with the Republic of Ireland is in part explained by relatively rapid growth by the manufacture of food products sector (especially in terms of that sector’s purchase of goods). This in turn may indicate a shift within the Northern Ireland economy towards food processing and away from engineering and advanced manufacturing. Any such structural shift would matter because in general, at the Northern Ireland and UK-wide level, productivity (output per worker) would be lower in food processing than in engineering and advanced manufacturing.
The extent to which there is up-to-data which can prove whether there is such a sectoral shift is happening is limited. The latest Northern Ireland Quarterly Employment Survey data indicates that in the 5 years to the end of 2025 employment in manufacture of food products increased by 2.3% whereas employment in manufacture of computers, electronic and optical equipment and electrical equipment declined (by 5.3% and 7.6%, respectively). It is true, however, that employment increased in SIC28 machinery, SIC 29 motor vehicles and SIC 30 other transport equipment).
Importantly, the Government’s current approach as to how to best mitigate the Irish Sea border frictions on movements of GB origin goods into Northern Ireland relies on the so-called “reset” in relations between the UK and EU. To the extent such a reset happens it is being argued this could achieve a SPS (plant and animal health and hygiene) agreement between the UK and EU which in turn will allegedly reduce the frictions imposed on moving food and related products into Northern Ireland from GB. But even if this approach to policy is successful, note that it will benefit some sectors more than others, notably food processing in contrast to advanced manufacturing. Thus, any differential sectoral impacts currently being experienced through the Protocol/Windsor Framework would be reinforced rather than removed.
Third, the Northern Ireland economy has sizeable trade surpluses compared to its southern neighbour in terms of the used car market and in terms of the wholesale trade. Those surpluses increased during the period since 2019. In terms of Northern Ireland retail sale of goods to the Republic of Ireland this increased from £70m to £621m so cross-border shopping was continuing to increase. This notwithstanding the provision in the Windsor Framework that many food products sold in Northern Ireland should carry a label that such items were not sale for the EU market. This always looked like a performative regulation and now the data confirms that.
Dr Esmond Birnie, Senior Economist Ulster University Business School
[i] The 2024 figure for manufacture of food products purchase of goods from the Republic of Ireland was suppressed in order to avoid disclosure of information which might be traced to small numbers of (identifiable) individual firms. I estimated that figure using the 2024 figure for purchases of goods and services combined using the 2023 percentage relationship between the purchase of goods separately compared to goods and services combined.
