Ireland’s medtech industry is importing more raw materials to keep pace with demand for its products, according to data published by the foreign exchange specialist Fexco International Payments.

The analysis, of more than 7,500 transactions made through Fexco International Payments, shows that since 2016 Irish Medtech firms have increased spending on material imports from the UK by a third (31%).

Imports have risen too, with spending on imports from the UK jumping by almost a fifth (18%) in the past 12 months alone.

The research, which compared import purchases made between January and October each year from 2016 to 2019, also found the number of transactions rose steadily after the UK’s Brexit referendum, before spiking this year.

Between 2016 and 2018, the number of transactions rose by 7%, while in the first 10 months of 2019 they surged by 20% compared to 2018 levels.

While the original increase in imports from the UK can be traced back to the fall in sterling after the 2016 Brexit referendum, 2019’s rapid growth in spending may be the product of a desire to stockpile materials ahead of what should have been Brexit Day, 31 October.

The rise in material imports also mirrors the progress of Ireland’s medtech sector, which now employs 38,000 people across 450 companies. According to Enterprise Ireland, the life sciences sector as a whole grew its exports by 7% in 2018. With export sales of €12.6 billion a year, medtech accounted for 11% of Irish goods exports in 2018, making Ireland the second biggest exporter of Medtech products in Europe.

By contrast, Britain’s medtech sector is faring less well. UK Government figures show the UK’s core Medtech sector has seen turnover stagnate or fall every year since 2010.

David Lamb, head of dealing at Fexco International Payments, said: “Medtech is a true Irish success story, and per capita, Ireland now has more people working in the sector than any other European country.

“While the UK is an important market for Irish medtech exports, it’s also a vital source of the raw materials Ireland’s medtech manufacturers need to make their products.

“Sterling’s weakness since the Brexit referendum has clearly spurred Ireland’s medtech firms into spending more, and more often, on raw materials from the UK. But the import boom accelerated sharply in 2019 as manufacturers stockpiled materials ahead of the scheduled Brexit date of Halloween.

“Though Brexit has been delayed once again, the threat of import tariffs being imposed in the event of a ‘no deal’ continues to concentrate Irish importers’ minds. And with a Euro still worth 10% more against the Pound than it was on the eve of the Brexit referendum, importing raw materials from the UK is an attractive way to mitigate rising wage bills at home.

“But with the UK election and the final course of Brexit hanging in the balance, the sterling exchange rate is likely to be volatile in coming months – and Irish firms that import regularly from Britain should consider locking in the current favourable exchange rate by using a forward contract.”