Discusses key economic indicators and trade statistics, which countries are dominant in the market, and other issues that affect trade.
The United States and Ireland enjoy a close cultural affinity and longstanding political, economic, and commercial relations. The outsized U.S.-Ireland commercial relationship, which exceeded $1 trillion in 2021, is significant by international standards and is particularly impressive relative to the country’s population of five million people.
With a GDP exceeding $504 billion in 2021, Ireland is one of the most open and export-driven economies in the world. Ireland remains a wealthy country and a net exporting nation with a per capita GDP in 2021 of $100,602. Alongside managing the after-effects of the public health COVID-19 pandemic, key priorities for the Irish government are continued economic recovery, job retention and creation, healthcare reform, housing and counteracting rising inflation due to soaring energy costs. The unemployment rate before the pandemic had reached a record low of 4.8 percent in February 2020 but hit a high of 28.2 percent in March 2020 due to pandemic-related unemployment. The Irish economy has however kicked back with unemployment falling to a new low of 4.4 percent in October 2022.
Buoyed by a slowly recovering domestic economy and a strong export sector, Ireland’s GDP increased by 14.3 percent in 2021, reinforcing its position as one of the best performing economies in the EU. Ireland’s economic post pandemic projections remain positive and the strongest among the Eurozone countries due to continued growth of exports by technology, pharmaceutical, medtech, and other large multi-national enterprise (MNEs) headquartered in Ireland. This exponential export growth has counteracted the negative impact resulting from the United Kingdom leaving the EU (Brexit).
In 2021, U.S. goods exports to Ireland exceeded $13.8 billion and included chemicals and pharmaceuticals, computers and electronic products, aircraft and transportation equipment, power generation technology, medical devices, and electrical equipment. The statistics for services from 2021 record the value of U.S. service exports to Ireland at $74.8 billion.
In 2021, Ireland’s total investment stock in the U.S. was valued at $269 billion, maintaining its ranking of the 9th largest source of FDI into the United States. Over 700 Irish firms employ more than 100,000 people across all 50 states, representing investment in the agri-food/nutrition, construction, healthcare, ICT, and professional and engineering services sectors. Conversely, the total stock of U.S. investment in Ireland was $556 billion in 2021. There are over 900 U.S. firms in Ireland which currently employ 190,000.
Like most developed economies in the world, Ireland is fighting runaway inflation caused by the effect of rising fuel costs precipitated by Russia’s invasion of Ukraine. Inflation by October 2022 hit a 38-year record high of 9.5 percent. Ireland’s electricity supply relies on generators powered by natural gas, 70 percent of which is imported from the UK. Power and transport systems have been severely affected by rising costs due to Ireland’s dependence on imports of energy products, gasoline, diesel, and natural gas,
U.S. Embassy Dublin works closely with local partners including the Irish Exporters Association, Irish Business & Employers Confederation, Enterprise Ireland, the American and local Chambers of Commerce, and Irish government and national agencies to advance the U.S.-Irish economic relationship and forge joint prosperity on both sides of the Atlantic.
Top reasons why U.S. companies should consider exporting to Ireland:
U.S. companies can take advantage of the fact that Ireland is the only European market that is a member of the EU, a member of the Eurozone, and English speaking. In addition to the advantage of a common language, access to educated and well-connected business partners is relatively easy in a pro-business and common law environment. Ireland is ranked 11 on the 2022 IMD World Competitiveness Ranking table, up from 13 in 2021.
Ireland is a viable test market for U.S. small-medium enterprises (SMEs) looking to export for the first time into Europe. Ireland’s strategic geographical location also positions the country as a gateway to Europe with access to a wider market of 742 million people.
Ireland’s high receptiveness to U.S. products and services creates a fertile market for American brands across sectors. U.S. goods and technologies are perceived to be of high quality, and U.S. companies receive positive support from local partners, helping to further export goals for Ireland and the European marketplace.
Ireland has, for the past number of years, been the fastest growing economy in Europe. The outlook for Ireland’s economy is positive despite increasing inflation, rising energy prices, and continued global challenges. Ireland’s GDP growth forecast for 2022 is predicted to be in excess of 12 percent supporting a sustained demand for U.S. products, technologies, and services in the short to medium term.