American Chamber has excellent access to Irish and European public policy networks, opinion leaders and leading media commentators. Through participation in Working Groups and contributions to submissions for Government, the Chamber keeps Irish decision makers focussed on the factors contributing to the continued attractiveness of Ireland as a location for foreign direct investment. More about the Chamber

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April Trade & Investment Report

AmCham Commentary 

Brian Cotter - Public Affairs Director

The potential for Ireland's economic recovery to be driven off track by increased cost pressures was brought into stark relief last week by the National Competitiveness Council (NCC). Highlighting the uniformly high cost of utilities, recent increases in labour costs and persistently high prices for consumers, the report, Cost of Doing Business in Ireland 2014, is an important reminder that cost competitiveness improvements can be lost quickly.  You can read more on the report below.  The Chamber will make a number of policy interventions this year on competitiveness, particularly on the escalating costs of health insurance and energy supply to Government.  It was therefore welcome to hear An Taoiseach state that he and his cabinet take the NCC warning seriously at the US Embassy's 'Smart People Smart Economy' conference. 

It was heartening to hear from Marcus Segal, formerly of Zynga, at that same conference relate the positive experience he has had as an investor in Ireland, and in particular his remarks that any young tech company needs to be in Ireland if it wants to be a global success. Mr Segal praised the attitude and talent of the workforce in Ireland, and expressed his belief that there is 'something special' happening here.  The importance of attracting talented professionals into Ireland was also highlighted at the conference.  The Chamber will continue to be active on this topic in 2014. 

Key Economic Indicators

Indicators201220132014 (f)2015(f)Broad Trend
Irish GDP Growth0.7%0.5%2.0%3.2%
US GDP Growth2.2%2.3%-
 -
Irish GNP Growth1.5%0.1%

2.7%

2.6%
Irish Inflation (CPI)1.7%0.7%0.3%1.0%
US Inflation (CPI)1.7%1.2%--
Main ECB Interest Rates End of Year1.0%0.25%0.25%-
Irish Unemployment14.8%13.6%11.3% 10.4%
Balance of Payments C/A€7,250b€10,851b€11,682b €12,373b
Markit Eurozone Composite PMI (March) 49.1 46.5 53.1-

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   

Economic News

Optimism and output continue to rise in manufacturing and services 

Ireland's services sector expanded for the 20th month in a row in March while optimism among companies was at its second-highest level since March 2005.  The Investec Services Purchasing Managers Index (PMI) rose to 60.7 in March from 57.5 in February.  Promisingly, the subindex for new export business among services firms rose to 62.8 from 60.6.

In further positive news, Ireland's manufacturing sector grew in March for the tenth month in a row.  The Investec Manufacturing PMI registered 55.5 for the month, up from 52.9 in February, the fastest rate of expansion since April 2011. The PMI sub-index measuring employment slipped to 54.6 from 54.9 in February, albeit that this marked its 10th straight month of growth.

Source: The Irish Times

NCC issues warning on rising costs    

The National Competitiveness Council (NCC) has issued a warning 'that the Irish economy has reached a turning point in terms of cost competitiveness'.  In its most recent report, Cost of Doing Business in Ireland 2014, the NCC highlights a number of cost trends that are moving in the wrong direction in an already high cost environment.  Labour and utility costs have increased over recent years and are among the highest in the EU.  The Council point to the importance of taxation levels in determining wage demands and the need for a competitive income taxation system.  In addition, while the stabilisation of the commercial property sector is welcomed, the NCC warns of the risk that restricted supply of office space could lead to rent increases.  Due to a low inflation/low interest rate environment in the EU improvements in cost competitiveness through price reduction are difficult to achieve.  The NCC states therefore that 'productivity performance will assume an even more prominent role in driving Irish international competitiveness'. You can read the report here (pdf).

Source: National Competitiveness Council

Economic impact of FDI highlighted

Forfás has published its Annual Business Survey of Economic Impact which covers the period 2003 - 2012. The survey shows that client companies of the enterprise development agencies reported a rise in sales and exports in 2012. Direct expenditure in the Irish economy in terms of payroll and purchases of Irish materials and services produced in Ireland increased by 3.8% to approximately €40.8 billion in 2012. 

Highlights from the report include total sales for agency-assisted companies in 2012, which amounted to €157 billion, a 4.4% increase over 2011 sales of €150.5 billion. Foreign-owned companies account for €129.5 billion, an increase of 4.9% between 2011 and 2012. In addition, total exports amounted to €138 billion in 2012, a 5.1% increase over 2011 exports worth €131.65 billion.  Foreign-owned firms' exports increased by 5% from €118 billion to €124 billion between 2011 and 2012.  You can read the report here (pdf).

Source: Forfás 

Consumer confidence remains high 

The overall KBC Ireland/ESRI Consumer Sentiment Index decreased to 83.1 in March, from 85.5 in February. The 3-month moving average increased to 84.4 from 83.3 in February, a seven-year high and the eleventh consecutive increase.  Commenting on this continuing positivity KBC's Austin Hughes said "the small decline in the sentiment index in March doesn't seem to suggest any break from a gradually improving trend in Irish consumer confidence.  While we think that the mood of consumers is still continuing to improve, the small decline in the sentiment index in March suggests that a range of factors is restraining the scale of recovery. The most important reality for many consumers is that their personal finances remain under pressure."

Source: KBC/ESRI

Expansion in financial services sector

Financial Services Ireland (FSI) has released new research showing changes in the composition of the international financial services industry. Total employment in the sector was 35,700 at the end of 2012, with 6,000 net-jobs created in the previous three years. Of that total number, over 10,000 jobs in financial services are located outside the greater Dublin area. The study highlights a shift in employment patterns, with job losses in international banking but gains in payments, insurance and fund administration. The research also points to the high skill sets of employees, with 86% of staff having at least a bachelor's degree and 35% holding a graduate qualification.  The sector's value to the Irish economy and exchequer lies in the contribution of €2.3 billion in payroll and over €2 billion in tax per annum. You can read the report here (pdf). 

Source: Financial Services Ireland

Investment Announcements

Airbnb 

Airbnb, the community-driven hospitality company, have announced plans to significantly increase their presence in Ireland. The creation of 100 new roles will double their current Irish workforce to 200 employees by the end of the year. The company is currently recruiting for their customer experience and hospitality teams based in Dublin. 

Source: IDA

Alexion

Alexion Pharmaceuticals has announced plans to expand its Irish operations following the acquisition of a new site in West Dublin. The expansion will create approximately 200 new jobs as part of a €75 million investment by Alexion in this new site over the next two years. 200 new construction jobs are also expected to be created as a result of the expansion. Alexion's total job creation in Ireland is expected to rise to around 300 by 2016. Alexion Pharmaceuticals' CEO, Leonard Bell M.D., said "Our choice of Ireland reflects the calibre of the workforce and the country's culture of innovation".

Source: IDA

Eli Lilly

Eli Lilly, a leading biopharma company, have announced the creation of 100 jobs at their new campus in Kinsale.  They will be looking for highly qualified personnel across a range of disciplines to add to their existing staff,with the majority to be recruited this year.

Source: IDA

Intel

Intel Ireland have this month released details on the scale of its investment at its Leixlip facility in Co Kildare, including a spend of $5bn investment on an ongoing construction upgrade, which is employing 5,000 additional workers.  At the Leixlip site, the Irish management and employees have continued to grow their role in Intel's worldwide business for over 25 years - winning new projects for Ireland and, in the process, developing some of the most advanced manufacturing facilities anywhere in the world. 

Source: IDA

Kemp

KEMP Technologies has announced the creation of 50 new high end technology based positions over the next 3 years. Their Limerick base is the company's EMEA headquarters and these new jobs will bring their current Irish workforce to 80. In addition to the highly skilled roles, a proportion of jobs will be for graduates. KEMP Technologies CEO, Ray Downes, said "Choosing Limerick as KEMP's gateway to international Market expansion has turned out to be a tremendous success story for the company."

Source: IDA

Tintri

IT company, Tintri, has chosen to locate its EMEA technical support centre in Cork. Tintri produces storage for virtualisation and cloud environments, and employs almost 200 people worldwide. The firm's EMEA Vice-President, Doug Rich, said "Cork, with its wealth of technical resources, seemed like the ideal location." Tintri hopes to recruit most of the staff for the new technology hub locally from the technical talent in the region generated by graduates from University College Cork and Cork Institute of Technology. 

Source: IDA