11 April 2022
Go to release: International Sourcing Survey 2018-2020
The Central Statistics Office (CSO) has today (11 April 2022) published the first of two publications on the results of the Global Value Chains Survey. The first publication covers International Sourcing Statistics 2018-2020 while the second relates to Global Value Chain participation. International Sourcing refers to the total or partial movement of a business function from an enterprise in Ireland to another enterprise abroad. Business functions are common tasks carried out by the enterprise to bring goods/services to the market (e.g. Production of Goods, IT, Transport & Logistics, Marketing & Sales, etc.).
Commenting on the report, Colin Hanley, Statistician, said: "The results of the publication show the level, patterns and possible impacts of international sourcing on the Irish business economy. Between 2018 and 2020, 313 large and medium sized enterprises (50+ persons engaged) moved a business function abroad. A further 121 enterprises had considered engaging in international sourcing during this period.
More foreign-owned than Irish-owned enterprises engaged in international sourcing. Of the 1,807 foreign-owned enterprises, 217 (12%) engaged in international sourcing while 96 (4%) of 2,371 Irish-owned firms moved a business function abroad. The Transportation and Storage sector (17%) had the highest proportion of sourcing enterprises among all sectors.
Of the 313 enterprises that engaged in international sourcing, more than half (52%) moved a business function to another European Union member state while almost 39% of firms moved a business function to the United Kingdom. More than a quarter (26%) of sourcing enterprises moved a business function to India while 17% moved a business function to the USA or Canada.
More than half (56%) of enterprises that moved business functions abroad reported strategic decisions as being a very important motivating factor. For almost three in ten (30%) enterprises, a reduction of labour costs was a very important factor for engaging in international sourcing. The regulatory environment was not a very important motivating factor for 33% of sourcing firms compared to 7% who stated it was very important.
The most important barriers to international sourcing were legal or administrative (38%), tariffs and trade barriers (34%), quality concerns of the products/services (33%) and taxation issues (33%). The barriers mostly selected as being not important were linguistic or cultural (29%), proximity to existing clients in Ireland (28%) and access to finance or other financial constraints (28%).
COVID-19 related issues had disrupted international sourcing plans for almost 23% of enterprises. However, almost 2% of firms had moved or planned to move business function(s) back from abroad because of COVID-19. Meanwhile, 24% of firms reported that Brexit related issues had disrupted international sourcing plans, while almost 4% had moved or planned to move business functions back to Ireland from the UK.”
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