Looking past the lorries: The services opportunity in cross-border trade

Stuart Mathieson, Research Manager at InterTradeIreland, discusses the growing opportunities for north-south trade.

When people picture trade across the border, they generally picture a lorry: a container heading north on the A1, a milk tanker crossing near Enniskillen, pallets, paperwork and the visible machinery of moving goods between jurisdictions. That image has dominated the public conversation for much of the past decade, through the Brexit referendum, the Protocol negotiations, and the Windsor Framework.

While goods remain important, the fastest-growing part of the all-island economy cannot be loaded onto a lorry. It can be an architect in Belfast designing for a Dublin developer, an accountancy firm in Armagh serving clients across three counties, or a software team in Coleraine delivering code to a customer it may never meet. Services now account for around a quarter of everything Northern Ireland and the Republic of Ireland sell to each other, yet services receive a disproportionately small share of policy attention.

Against a challenging global backdrop, cross-border services trade is one of the clearest economic good-news stories on the island. Official figures show that bilateral services trade has more than quadrupled since 2011, rising from approximately £0.8 billion to £3.6 billion. Its share of total cross-border trade has increased from 14 per cent to 25 per cent. Between 2018 and 2024, services trade grew at an average annual rate of around 16 per cent, compared with roughly 12 per cent for goods.

Goods remain larger in absolute terms, and their continued growth is both a major strength and a testament to the hard work that has gone into keeping those lorries moving. But there is significant potential to grow in services. We commissioned Oxford Economics to dig deeper into the figures, and their research suggests that even the £3.6 billion headline understates the value because the official statistics exclude financial services and tourism. Including these sectors brings the estimated total value of services trade closer to £5.3 billion.

The North runs a services trade surplus with Ireland of around £2 billion, equivalent to approximately 3 per cent of its economic output. The Republic of Ireland is also the North’s largest services export market outside Great Britain, accounting for around 44 per cent of the services the North sells beyond the UK.

So why is this success story not trumpeted more widely? Its relative lack of visibility is partly a measurement problem. Goods are easier to count: a physical product crossing a border generates customs records and other administrative data, often available quickly. Services are generally measured through business surveys and statistical modelling, which take longer to get right, giving a less immediate picture.

“For more than 25 years, InterTradeIreland has helped firms understand the neighbouring market, develop cross-border partnerships, and build the capability to trade.”

Over the past decade, attention was understandably concentrated on the movement of goods: what could move, under which rules, and with what paperwork. That work was essential, and support for goods traders remains central to InterTradeIreland and our Trade offerings, including the Trade Hub. But while policy focused on keeping lorries moving, services trade continued to expand in the background.

Ironically, there is a compelling policy reason to pay more attention to services. The sectors driving services growth closely match the economic priorities of both jurisdictions. They include financial services and fintech; IT, software and cybersecurity; life sciences; professional and business services; and construction.

Northern Ireland has substantial strengths in these areas, while the Republic of Ireland provides a large, sophisticated and geographically close market. Construction is the largest bilateral services category and has been growing at around 21 per cent a year, supporting housing and infrastructure delivery. Given the recent Irish Critical Infrastructure Bill, there is a real opportunity for Northern Ireland construction firms to win contracts and help to deliver these vital infrastructure projects.

Technology, financial and professional services generate productive, well-paid employment and provide routes into higher-value markets. Life sciences benefit from research, clinical, and commercial relationships that already operate across the island. InterTradeIreland is currently supporting the development of an all-island precision oncology cluster, which is just one example of how these sectors can grow together.

Cross-border services offer a practical route to higher productivity, stronger indigenous businesses, more exporters, and better-paid employment. However, there are specific policy challenges. Services barriers are rarely tariffs. They are more often regulatory or administrative: professional recognition, licensing, data rules, VAT, payroll and uncertainty about which standards apply.

Unlike goods, services in Northern Ireland and the Republic of Ireland operate under different regulatory systems. Differences can therefore accumulate as the UK and EU develop separate approaches in fields such as banking, artificial intelligence, and digital regulation. These frictions fall most heavily on SMEs, which face many of the same fixed costs as larger firms but have fewer resources to absorb them.

The necessary policy response is relatively clear. Better services data should be treated as economic infrastructure, allowing governments and agencies to identify growth sectors, emerging barriers, and untapped potential. Regulatory developments should be monitored systematically so businesses receive early guidance rather than discovering divergence only when a contract is at risk. Support should focus on the real costs of market entry: information, compliance, networks, procurement opportunities, and trusted introductions.

The encouraging point is that much of the necessary capability already exists. For more than 25 years, InterTradeIreland has helped firms understand the neighbouring market, develop cross-border partnerships, and build the capability to trade. The Trade Hub now provides businesses with direct support on the specific problems they encounter.

The next phase is about recognising the services economy that has emerged and helping more firms participate in it. The lorries will remain important. But the next chapter of the cross-border trade story will also be written in offices, laboratories, construction sites, and software teams.

These opportunities and the actions needed to unfurl them are explored in the full findings of Oxford Economics research, which will be launched at an InterTradeIreland event at the end of September, called Unlocking the Potential of All-Island Services Trade.

For more information about this event, email
E: info@intertradeireland.com