Cross-Border shopping has shown a sharp incline this year to an estimated €418 million from €385 million in 2016 as shoppers in the South headed North to take advantage of the drop in value of sterling, a new report from EY shows.
The figures, which do not include car sales or online shopping, show cross-Border spending is back at 2010 levels, driven by a 12% appreciation in the euro relative to the pound since the vote by the UK to leave the European Union, reports Irish Times.
Gross Domestic Product
The recently published EY report showed an increasing gap in economic fortunes north and south with gross domestic product (GDP) in the Republic forecast to total 4.9% this year, versus a more modest 1.4% for Northern Ireland.
The report noted that both economies are enjoying strong growth in jobs, property prices and average wage levels, though very different inflation levels are creating a divergence in spending power.
Speaking with the Irish Times, EY chief economist Neil Gibson said that the difference between the two economies was accelerating because of the pressure on consumers in the North where pay rises were not keeping up with inflation.
“While you’ve got pay rises of roughly 2 per cent in Ireland, that counts as a pay rise in the South and a cut in the North so the impact of inflation is really beginning to influence the two different projections,” he said.
EY’s report indicates that the increase in cross-Border shopping over the last year helped offset a growing gap in the retail performance across the two economies.
The retail sector is seen to have 'recovered from the recession with total growth of 14% in the Republic since 2013’s historic lows'.
EY reportedly anticipates that job growth in retail will continue in the South with the addition of approximately 10,500 jobs in the sector between 2017 and 2022, while a decrease of 3,000 is forecast for the North.
Gibson added: “Cross-Border flows are helping bridge some of the divergence. Northern Ireland’s consumer sector would be having a much tougher time if it wasn’t for cross-Border shopping flows and an increase in tourists.”
© 2017 - Checkout Magazine by Donna Ahern