Why are exports of NI services growing twice as fast as exports of goods?

Think of a Northern Ireland export and it is probably something like cases of Bushmills whiskey being shipped to the US.

Or maybe an elaborate quarrying machine from mid-Ulster being delivered to an Australian mining operation.

But new, official figures suggest that Northern Ireland exports increasingly aren't physical products.

Instead they are more likely to reflect the work being done by a software engineer or accountant sitting in a Belfast office block.

These are services sector workers, people engaged in a broad range of activities like accountancy, law, IT, consultancy and tourism.

The figures released this week suggest that in 2024 exports of services grew twice as fast as the exports of goods.

Services accounted for almost 39% of all Northern Ireland's external sales, a significant jump from fewer than 34% in 2023.

The Ulster University economist, Esmond Birnie, says the figures "highlight a very important structural shift is continuing in the NI economy".

"We are becoming more and more of a service sector economy. During 2024 total sales of goods grew by 5.3% but sales of services grew at more than twice that rate."

There are some caveats to the figures.

Northern Ireland trade data is not adjusted for inflation so it can be unclear what is real growth in the volume of exports and what is just higher prices.

However, other economic data supports the case that the increase in service exports has been significant.

In the years since the pandemic the output of the NI business services and finance sector has grown by 32%.

In comparison the economy as a whole has only expanded by 12% with manufacturing output growing by around 7%.

The pace of growth in business services has moderated in the last 18 months but there is still expansion.

Earlier this month Bank of America said it had recruited the first 70 staff for a planned 1,000-person operation based at Belfast harbour.

Multinationals like Bank of America will count for a significant chunk of service exports in the form of work being done in Northern Ireland for their parent company HQs in the US or elsewhere.

It's now 20 years since Bank of America's rival, Citi, was persuaded to set up in Belfast and a series of investments from other big US financial service sector firms has followed.

For local services businesses, the Republic of Ireland is an important and growing market says Stuart Anderson, Director of International Relations at NI Chamber of Commerce.

"It's been the case for some time that Northern Ireland professional services have been operating in the southern market because they typically get a higher hourly rate," he said.

He adds that the major infrastructure investments being planned by the Irish government is already creating export opportunities for NI-based engineering, construction and planning consultants.

"If you look at the infrastructure investment plans, the Irish government's set out their €275bn plan over a 10-year period.

"So you've got a lot of engineers, construction services that I know, and I'm aware of, are working actively on southern infrastructure projects. And then you've got the renewables market as well.

"So whether it's legal services, accounting services, or construction and engineering services, you can see an awful lot of work being done in the south because, one, there's a clear pipeline, but two, there is also a higher rate of return for the services."

• Fully remote: The service is provided over the internet or email without the NI service provider crossing a border
• In person: An NI service provider travels to another country to work on a project
• Foreign investment: An NI service provider establishes an office in another country and supplies services from there
• Consumer comes to NI: Someone from outside Northern Ireland travels to pay for a service; typically tourism or private medical treatment