Boyle Practical Project Management Consulting
About BPPM
Project Plans

Planning for Brexit

In a referendum on the 23rd of June 2016 the UK electorate voted to leave the EU. As a result the changing relationship between the UK and Ireland will  be determined between EU and UK parliamentarians. The impacts on individuals and businesses in Ireland and the UK will range between minor where the agreement reached is similar to that between Norway and the EU, to major where the trade between the EU and the UK comes under the World Trade Organisation (WTO) tariff regime and labourr movement between the EU and the UK is curtailed.


The Exchange Rate

In September 1992 Britain  adopted a floating exchange rate system after withdrawing the pound sterling from the European Exchange Rate Mechanism (ERM). The Brexit factor has already kicked in with a weakening of the pound against the euro and the dollar in this floating exchange rate system.
The effects will be:
 1. The Higher prices of imported goods should spell a drop in demand.
 2. Exports should see a rise in demand because of the falling value of Sterling.

The impacts may vary dependant on the types of goods and services.

Exchange Rate Graph Euro to GBP Sterling 2015-2017
Source: Graph compiled from Central Bank of Ireland Data

Exchange Rate Graph US Dollar to GBP Sterling 2015-2017
Source: Graph compiled from Central Bank of Ireland Data

Business Sector Analysis

The methodology BPPM shall be using to measure potential impacts on sectoral businesses is an econometric model. This model focuses on the behavior of the Irish and UK economies in terms of gross domestic product, product consumption,  employment, product imports and product exports using variables such as tarriffs, exchange rates, and interest rates.

The price elasticity of demand for products is the degree to which demand for a good or service varies with its price. Price elasticity of demand varies both within and between sectors dependent on  factors such as:   

1. - Availability of Substitutes  

2. - Definition of Product 

3. - Number of Product Uses

D-Day for the British Prime Minister Theresa May to trigger Article 50 and initiate the UK’s exit from the European Union is 29th March 2017. The exit process negotiations may take around two years to complete. However the decision to leave has already had an impact on Irish exports. The USA and the UK are by far, Ireland’s largest trading partners. The impact of currency changes is reflected by the fact that exports to the UK decreased from 12.29% (€13.8.4bn) 2015 to 11.39% (€13.31bn) in 2016.

Exports to the UK

The impacts of price changes brought about because of exchange rates and tariffs are examined for good and services within the following sectors.

Food and Live Animals Beverages and Tobacco
Crude Materials, Inedible, Except Fuels Mineral Fuels, Lubricants and Related Materials
Animal and Vegetable Oils, Fats and Waxes Chemicals and Related Products, n.e.s.
Manufactured Goods Classified Chiefly by Material Machinery and Transport Equipment
Miscellaneous Manufactured Articles Commodities and Transactions n.e.s.
n.e.s.: Not elsewhere specified

Irish Exports Classified by Commodity 2014-2016

Irish Exports per Commodity 2014-2016

Changes in Irish Exports to Great Britain and Globally 

Change in Irish Exports Globally 2015-2016Source: Chart compiled from Central Statistics Office Data

Change in Irish Exports to Great Britain 2015-2016
Source: Chart compiled from Central Statistics Office Data

A username and password is required to gain access to the detailed sectoral analyses. Everyone who follows BPPM on any of the social network links below returns the contact form confirming which platform they are following on, and becomes  a member. will be given the access code and informed of updates. Please include any particular areas you would like to see examined, on the comments form.

Effects of Brexit on the UK and Ireland Economies

The formula for an economy’s annual gross domestic product GDP is the sum total of C + G + (X – M), where C, and G represent consumer spending and government spending. (X – M) which represents exports minus imports, or net exports. If exports exceed imports, the net exports figure would be positive, indicating that the nation has a trade surplus. If exports are less than imports, the net exports figure would be negative, and the nation has a trade deficit.

 Imports and Exports Ireland 1992 to 2016       Personal consumption of goods and services (€m) 

 Source: Figures from Central Statistics Office (CSO) 
Expenditure by central and local government on current goods and services (€m)     Gross domestic product at constant market prices (€m)
Source: Figures from Central Statistics Office (CSO) 

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