As Ibec CEO Danny McCoy is revealed as one of the top speakers at this September’s Ireland’s Convenience Retailer Summit, the respected economist provides a no-holds-barred account of the state’s post-Brexit outlook
Brexit may be the biggest challenge to face Ireland since the foundation of the state, according to Ibec CEO Danny McCoy, but he has some reasons to be cheerful.
The influential economist heads up Ireland largest business organisation, Ibec, and will be one of the world-class speakers presenting at the Ireland’s Convenience Retailer Conference on September 6 in Dublin.
Brexit is by far the biggest challenge for Ireland since the formation of the state
Having held lecturing posts at Dublin City University, University College London, University of Oxford and Trinity College Dublin, and former manager of the European Forecasting Network of European research institutes, few are better placed to weigh-up Ireland’s post-Brexit outlook.
Speaking to Ireland’s Forecourt & Convenience Retailer shortly after the UK Prime Minister Teresa May officially triggered the beginning of Brexit, Mr McCoy told this magazine that Ireland faced a future of competition with its once closest trading partner.
“Brexit is by far the biggest challenge for Ireland since the formation of the state,” the Ibec chief said. “It’s even more significant that Ireland joined the EU with Britain in 1973, and now Britain is leaving unilaterally, which creates a lot of risk.
“Ireland and Britain has been working together in a situation of collaboration and competition, but not that’s just going to be competition.”
While the UK’s decision is potentially epoch-making for the Irish economy, it does present some opportunities. However, according to Mr McCoy, these may not be realised for some time.
“The outlook is negative in the short term, but things could be positive in the long term,” he said. “It’s possible that Britain could be successful outside the EU.
“Ireland is in a really strong growth position at the minute, and a core part of that is a young educated workforce, with strong population growth, immigration, and improving infrastructure.
“Ireland’s growth rate is at 4% and I think that’s sustainable right the way through to the next generation.”
Mr McCoy said Brexit provided a number of sectors with opportunities, while he was concerned some could be in for a rough period.
“The financial services industry has a big opportunity here with the UK facing the possibility of losing its financial ‘passporting’ [access to European financial transactions without additional national authorisation]. We may even see new sectors beginning to emerge.
“However, there will be winners and losers.”
The Ibec chief pointed out that one of the sectors likely to face difficulties is the farming and agri-food sectors, for which the UK is a key export market.
“Ultimately, Brexit will be a net loss for Ireland in the short term at least, but there will be opportunities for some,” he said. “Market diversification could help the agriculture sector, and a lot will depend on the nature of the break up. There could be consequences for the medical technology sector, for example.”
Expanding on the nature of the UK’s eventual departure, Mr McCoy dismissed speculation over the British Government’s readiness to leave with no deal as “a nonsense”.
No matter what happens, a bad deal will still be better than no deal
The ‘no deal’ scenario appeared more likely in March after UK Brexit minister David Davis insisted quitting the EU without a deal was “not as frightening as some people think”. Most analysts believe this would leave the UK adrift from trade with the EU, with hefty tariffs in place and huge legal difficulties left unaddressed.
However, Mr McCoy was adamant that such an outcome was not realistic.
“No matter what happens, a bad deal will still be better than no deal,” he said. “The idea of the UK leaving without a deal in place is a non-starter, it won’t happen. It’s just one of a number of banal Brexit statements from the UK Government and Prime Minister Theresa May, like ‘Brexit means Brexit’ and the ‘red, white and blue Brexit’.”
The Ibec CEO said there were a number of reasons why a ‘no deal’ exit was unlikely, chiefly the UK’s obligations to the European Court of Justice, especially its commercial rulings.
It’s for those reasons that Danny believes the remaining 27 EU states will eventually offer the UK a bespoke deal.
“Britain is a G7 country and a nuclear power,” he said. “It’s an important part of the EU and will get a good deal.”
Looking closer to home, Danny said he is looking forward to sharing his insights on the international and local outlook when he takes to the podium during the Ireland’s Convenience Retailer Summit.
The Summit, taking place on September 6 at the Clayton on Burlington Road, Dublin, will feature some of the biggest names in international retailing, market analysis, and motivation, including the Ibec CEO, Mr McCoy.
The Summit involves three strands, including a conference, a trade exhibition, and the annual Ireland’s Forecourt & Convenience Retailer Awards – one of longest established industry ceremonies attended by an expected 500 guests.
Revealing some of the insights he expects to share on the day, Danny said: “One of the things I’ll be talking about is what is going to happen to domestic consumer demand.
“There are a number of good omens for the local convenience retail sector, such as the increasing population – more people means more mouths to feed, which means more opportunity for retailers!
“I would say the outlook is quite positive for convenience stores. The economic growth means we anticipate Ireland becoming a richer country, and that means that we’ll not only have more people, but those people will have more money.
“There will of course still be challenges for the convenience retail sector, with the internet and new disruptive challengers in the market.
“But overall the underlying trends are good, and it’s looking very positive for the future.”