May Trade & Investment Report
Brian Cotter - Public Affairs Director
April was a crucial month as momentum toward an EU-US Transatlantic Trade and Investment Partnership (TTIP) agreement built. An informal meeting of the EU trade ministers in Dublin, bolstered by the presence of the US Ambassador to the EU, William Kennard, and a number of business roundtables, conferences and media set-pieces put Ireland in the spotlight in April during its Presidency of the Council of the EU. The Chamber is naturally supportive of moves to eliminate tariffs and reduce barriers to trade and investment. A successful negotiation of a new Transatlantic Partnership could boost Irish GDP by €800m per annum, creating at least 4,000 additional jobs here. Our unique relationship with America is a source of strength. Given the openness of our economy, Ireland stands to benefit disproportionately from increased trade and investment flows - especially between the US and Europe. The Chamber took the opportunity to underline the vital importance of
that relationship to members of the Joint Oireachtas Committee on Foreign Affairs and Trade on May 1st. You can view some of that testimony via the link included in the report below. Let's hope for an ambitious outcome from the Irish Presidency in June.
Key Economic Indicators
Arrow Direction indicates direction of trend;arrow colour indicates whether trends are perceived as positive (Green) or negative (red).
(f) = forecast
All Irish figures sourced from Central Bank of Ireland Quarterly Bulletin
Why we need a trade and investment partnership
In April the American Chamber's President, Peter Keegan, and Chief Executive, Joanne Richardson, launched a brochure entitled ‘The Transatlantic Opportunity', addressing ‘why we need a trade and investment partnership'. The brochure was commissioned by both the American Chamber of Commerce Ireland and the American Chamber of Commerce to the EU. An ambitious TTIP agreement would deliver GDP growth equivalent to providing every worker in Ireland with an extra year's salary over the course of their career. Launching the paper Mr Keegan noted that Ireland,
as a leading economic player in the transatlantic economy will see economic growth as a direct result of any new deal negotiated: "This is a relationship that is vital to the strength of our economy, job creation and competitiveness". Removing barriers to investment, tariffs, and non-tariff barriers, and strengthening the protection of intellectual property are vital elements in a deepened transatlantic commercial relationship.
You can read the report here and view a photograph from the photo call with Minister for Jobs, Enterprise and Innovation Richard Bruton here. The Chamber also took the opportunity recently to brief the Joint Oireachtas Committee on Foreign Affairs and Trade and underlined the vital importance of the Ireland-US economic relationship. You can view some of that testimony here.
Data protection matters
The American Chamber, in partnership with the American Chamber of Commerce to the EU, hosted an event highlighting key issues for data protection, proposed new regulations and innovative practices in April. Minister for Justice and Equality Alan Shatter TD was our key note speaker; two sets of industry experts made up panels discussing the proposed General Data Protection Regulation and practices in data innovation, with closing remarks from the US Embassy Chargé d'Affaires,
John Hennessey-Niland. The panels were well moderated by representatives from Matheson and Eversheds respectively. The event coincided with the launch of the Chamber's brochure ‘Data: Protection, Regulation and Innovation' which you can read here. The Chamber will be active on this and related topics throughout 2013.
Tax revenue to date hits targets
According to the Department of Finance tax returns for April showed a year on year increase of 2.4% on 2012. Revenue came in at €2,129m, up by €51m on last April. The figures are half the increase targeted by the Government, though revenues for the year to date at just under €11b are on target. VAT remains weak as retail spending continues to be underwhelming. The corporate tax take for the year is ahead of target, though it undershot compared to April 2012, and remains one of the most volatile sources of revenue.
Sources: Department of Finance, The Irish Times
Exports fall on weaker international demand
The latest figures from the CSO show that goods exports fell by €753 million to €6.65 billion in February compared with the same period last year. This represented a 10% decline. On a monthly basis, the figures show a seasonally adjusted increase in exports of 2.2% (154m) to €7b from January, while imports fell by 2% (€69m) to €3.88b. This resulted in an 8% rise in the economy's seasonally adjusted trade surplus to €3.13b. Declines in the exports of medical and pharmaceutical products and in organic chemicals were the main drivers in falling exports.
Sources: CSO, The Irish Times
Mixed picture from PMIs
Irish manufacturing orders shrank at their fastest rate in 19 months in April as sluggish orders both at home and abroad led to the sharpest contraction in output since August 2009. The NCB Manufacturing Purchasing Managers' Index (PMI) fell below the 50 line (dividing growth from contraction) for the first time in more than a year in March (to 48.6), and dropped further to 48.0 in April. The poor PMI data adds to the less positive tone of recent economic news as the recession affecting much of the EU eats into export growth. On a more positive note the NCB Services PMI registered an increase to 55.2 from 52.3 in March. Business activity quickened in April, as did new orders, with activity and orders having increased in each of the past nine months.
Sources: NCB, The Irish Times
Consumer sentiment stabilises
The overall KBC Ireland/ESRI Consumer Sentiment Index increased marginally from 59.4 in February to 60.0 in March. The 3-month moving average climbed from 57.8 to 61.2. Commenting on the results Kevin Timoney of the ESRI said, "Consumer sentiment was stable in March. There was a small improvement compared to last month and a small reduction compared to March of last year. The 3-month moving average improved to 61.2 from 57.8 in February, due to the influence ofDecember's low reading on this trend measure. Sentiment improved mainly due to the improved buying climate for durable consumer goods. The perception of personal finances worsened, while expectations of unemployment and the economy in general improved modestly."
Source: KBC Ireland/ESRI
Ireland is ‘best to invest' in Western Europe
The fifth annual ‘Best to Invest' rankings of nations and metro areas for investment-attraction
activity in 2012 from Site Selection ranked Ireland as the best location in Western Europe. Site Selection is a magazine for corporate real estate strategy and area economic development. Ireland came out on top ahead of Germany (2nd), France (3rd), Finland (4th) and the Netherlands (5th). Each country was ranked on the total number of projects, investment and jobs created both as raw value and as a per capita value. Dublin was the 3rd highest ranked metro area, behind Frankfurt (1st) and Paris (2nd). You can view the report here.
Ambition for the manufacturing sector
Two Forfás reports on manufacturing were issued in April, examining the future skills needs of the manufacturing sectors and seeking to set strategic ambitions up to 2020. The reports highlight many of the on-going issues which the Chamber has been pushing with Government, namely the need to increase our skills capacity in growth areas, ensure that up-skilling and reskilling supports are available and course content is kept current with industry need. You can read both reports here and here.
DCU Licencing scheme
Dublin City University have launched a scheme to make patent innovations more widely
available. While marking World Intellectual Property Day the university announced its fast-track DCU Licence Express Scheme which will make selected patented innovations available to industry and entrepreneurs. This move, the first by an Irish university, will help to ensure that research funded by the Irish Exchequer is widely promoted and will make it easier for companies to gain access to university technologies. You can find out more about the scheme here.
Electronic payments firm ACI Worldwide is expanding its Software Development Centre in Limerick with the creation of 60 new posts. ACI is a major vendor of software and services to the global payments industry. Recruitment for the jobs, mainly in software development, is already underway.
Marin Software Incorporated, provider of a leading advertising management platform for search, display, social and mobile, is establishing its international headquarters in Dublin and plans to create 35 new jobs over the next three years. The office will initially have responsibility for international finance, office administration, global customer and technical support and intends to expand to
sales and IT.
Squarespace, a leading all-in-one website publishing platform, plans to establish its EMEA Headquarters in Dublin, along with the creation of 100 new jobs. Openings in customer services are already being advertised by the company.
Zeus Industrial Products (Ireland) Limited is set to create over 100 new jobs with the expansion of its facilities in Donegal as part of a €10 million investment. The company is submitting a planning application to construct an expansion of its existing facility in the IDA Business Park in
Letterkenny. South Carolina-headquartered Zeus develops and manufactures specialised medical and industrial fluoropolymer tubing products, which are also used in the automotive and aerospace sectors. The company currently employs 120 employees, and the phased expansion will allow it to support up to 225 staff.
Source: The Irish Times