The Central Statistics Office (CSO) has today issued results on Global Value Chain (GVC) participation for the year 2020. This is the second publication from the GVC survey following the results on International Sourcing. In a highly globalised economy, enterprises increasingly organise the production process into smaller activities located across different countries to bring goods and services to market. The results of this publication provide users with relevant statistical information on these GVC arrangements.
Increased regulatory burden due to Brexit has impacted 54% of businesses.
Two in five (40%) enterprises had difficulty sourcing raw materials or intermediate products from suppliers abroad due to COVID-19.
More enterprises (47%) purchased goods/materials from suppliers abroad than supplied to enterprises overseas (24%).
Raw Materials (21%) and Machinery & Other Technical Equipment (20%) used in a firm's production were the most common purchases from abroad.
The United Kingdom was the most popular location for both global purchasing and supplying of goods/materials and services.
| Enterprises engaged in Global Value Chain arrangements by sector, 2020 | |||||||||
| % of enterprises | |||||||||
| Non-manufacturing Industry and Construction | Manufacturing | Wholesale and Retail | Services | Total | |||||
| % | % | % | % | % | |||||
| Purchased goods/materials from enterprises abroad | 55 | 93 | 68 | 22 | 47 | ||||
| Supplied goods/materials to enterprises abroad | 18 | 82 | 29 | 4 | 24 | ||||
| Purchased services from enterprises abroad | 32 | 45 | 28 | 35 | 35 | ||||
| Supplied services to enterprises abroad | 19 | 13 | 7 | 32 | 22 | ||||
| X-axis label | Purchased goods/materials from enterprises abroad | Supplied goods/materials to enterprises abroad | Purchased services from enterprises abroad | Supplied services to enterprises abroad |
|---|---|---|---|---|
| Non-manufacturing Industry and Construction | 55 | 18 | 32 | 19 |
| Manufacturing | 93 | 82 | 45 | 13 |
| Wholesale and Retail | 68 | 29 | 28 | 7 |
| Services | 22 | 4 | 35 | 32 |
| Total | 47 | 24 | 35 | 22 |
More enterprises purchased from abroad than supplied to abroad
Almost half (47%) of enterprises purchased goods/materials from abroad in 2020 while 24% supplied goods/materials. More than a third (35%) purchased services while 22% supplied services.
More than nine in ten (93%) Manufacturing enterprises purchased goods/materials from abroad while 82% supplied goods/materials. Manufacturing also had the highest proportion of firms (45%) purchasing services from abroad. Almost a third (32%) of enterprises in the Services sector supplied services abroad in 2020. See Figure 1 and Headline Table.
Most enterprises that purchased goods/materials from abroad purchased from the UK or the EU
Almost four in ten (37%) enterprises indicated that they purchased goods/materials from the United Kingdom, while 35% purchased from the European Union (EU27, excluding Ireland). Almost one in ten (9%) enterprises purchased from a European country outside the EU and UK, while 21% purchased from the rest of the world.
Raw materials used in the firm’s own production process (21%) and machinery & other technical equipment used by the business (20%) were the most common purchases. Products designed by another company for resale on domestic or foreign markets (7%) was the least reported type of purchase. See Figure 2 and Table 1.
Most firms purchased services from the UK or the EU
A quarter (25%) of enterprises indicated that they purchased services from the United Kingdom, while 24% purchased from the European Union (EU27, excluding Ireland).
ICT services (16%) and distribution & logistics (12%) were the most common purchased services from enterprises abroad. Research and Development (4%) was the least reported type of purchase. See Figure 3 and Table 2.
Almost a quarter of firms supplied goods/materials to abroad
Almost a quarter of enterprises in Ireland indicated that they supplied goods/materials to enterprises abroad, of which 13% said they supplied final goods designed by the company for resale, followed by final goods designed by another company for resale (6%). Machinery & other technical equipment used by own customers abroad was the lowest proportion of goods/materials supplied abroad (2%).
The UK (19%) had the highest proportion of suppliers followed by the EU (17%). Less than one in ten enterprises (7%) supplied to other European countries while 13% supplied to the rest of the world. See Figure 4 and Table 3.
UK and EU were the most common locations to supply services
More enterprises indicated that they supplied services to the United Kingdom (16%) and the European Union (EU27, excluding Ireland) (15%).
Other support functions (7%), ICT services (6%) and administrative & management functions (5%) were the most common services supplied abroad. Research and Development (2%) was the least reported service supplied to enterprises overseas. See Figure 5 and Table 4.
Cancellation of orders/decline in incoming orders from domestic customers was the most common impact of COVID-19
Almost half (47%) of enterprises said cancellation of orders/decline in incoming orders from domestic customers due to COVID-19 has impacted them. A decline in orders from customers abroad impacted 34% of enterprises.
COVID-19 impacted GVC arrangements both home and abroad. Due to COVID-19, more than two in five (44%) enterprises had difficulty acquiring raw materials or intermediate products from suppliers domestically, while 40% said they had difficulty with suppliers from abroad. See Figure 6 and Table 5.
More than half of enterprises have been impacted by Brexit related regulatory burden
Over half (54%) of enterprises have been impacted by an increased regulatory burden due to Brexit. More than two in five (43%) enterprises reported that Brexit made it difficult to acquire raw materials or intermediate products from suppliers in the UK, while 30% had difficulty transporting goods produced in the UK back to the enterprise or transporting goods to final customers. See Figure 7 and Table 6.
| X-axis label | Purchased goods/materials from enterprises abroad |
|---|---|
| Italy | 8824 |
| Poland | 6696 |
| Netherlands | 4533 |
| Norway | 4232 |
| Lithuania | 3112 |
| Portugal | 3055 |
| Hungary | 2881 |
| Sweden | 2000 |
| IRELAND | 1941 |
| Denmark | 1766 |
| Finland | 1664 |
| Bulgaria | 1613 |
| Latvia | 754 |
| Austria | 740 |
| Malta | 252 |
Among the countries that participated in this survey, Italy ranked highest with 8,824 enterprises purchasing goods or materials from enterprises abroad. It also ranked highest for supplying goods or materials to enterprises overseas with 8,593 enterprises. See Figure 8 and Table 7.
Statistician's Comment
Commenting on today’s publication, Colin Hanley, Statistician, in the Business Statistics Division, said:
“The results of this publication show the level of participation in GVC arrangements in 2020. Almost half (47%) of enterprises (with 50 or more persons engaged) purchased goods/materials abroad for use in their own production, while 24% supplied goods/materials abroad. More than a third (35%) purchased services abroad, while 22% supplied services to another firm overseas.
Enterprises indicated that Raw Materials (21%) and Machinery & Other Technical Equipment (20%) used in a firm’s production were the most common purchases from abroad, while final goods designed by the company for resale (13%) were the most supplied. Information Communication & Technology services were the most purchased service from abroad. The majority of enterprises that purchased or supplied goods/materials and services abroad did so with the United Kingdom.
COVID-19 impacted GVC arrangements both home and abroad. Due to COVID-19, more than two in five enterprises (44%) had difficulty acquiring raw materials or intermediate products from suppliers domestically, compared with 40% of enterprises having difficulty with suppliers from abroad. Meanwhile more than half (54%) of enterprises had been impacted by an increased regulatory burden due to Brexit.”