October Trade & Investment Report
Brian Cotter - Public Affairs Director
As Budget Day approaches a number of reports remind us of the progress that Ireland has made in restoring its reputation and global standing. Furthermore, Ireland's economic prospects look brighter than they have done in some time. As ever, though, we must guard against complacency and seek to ensure that we make the right decisions to sustain our competitiveness. The Chamber President, Louise Phelan, recently called on the Minister for Finance to deliver a budget that is both "employment and employee friendly". Key to that will be delivering on our ability to attract and retain key skilled employees into Ireland.
The recent Hays Global Skills Index 2014 highlighted the fact that for Ireland 'talent mismatch remains problematic as many high-skilled workers who lost their jobs in the economic downturn relocated, exacerbating, and in some cases creating, skills shortages.' This goes to the heart of our call for a series of measures including a reduction in the income tax burden, abolition of the pension levy, and recasting the assignee tax regime, that will help to attract back talent that left Ireland, and attract in new specialist and leadership talent, to help drive the recovery forward.
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
Consumer sentiment high on expectations of growth
September saw Irish consumer sentiment rise to its highest level since January 2007 with greater optimism in relation to economic growth and improvement in the outlook for household finances in the coming year, pushed the index up. The KBC Bank Ireland/ESRI Consumer Sentiment Index rose to 92.8 from 87.1 in August, as all the main components of the index recorded monthly gains. Commenting on the results the ESRI stated that "households now have a more positive perception of the economic outlook for the next year. Households continue to feel positive in their views of the labour market and in their expectations for their financial situation over the next 12 months."
Sources: KBC Bank/ESRI, The Irish Times
Second year of expansion gets underway for services sector
Ireland's services sector has entered its second year of continuous growth as measured by Investec's Services Purchasing Managers Index (PMI). The index registered 62.5 in September, marginally up from 62.4 in August, and signalled the 25th month of expansion. New business orders hit an eight year high registering the highest mark since May 2006. Encouragingly survey respondents indicate that clients are increasingly willing to commit to new projects based on their optimism about the Irish economy.
Meanwhile the Investec Manufacturing PMI fell away a little in September, down to 55.7 from August's 15-year high of 57.3, but still in positive territory. Commenting on the results, Investec Chief Economist Philip O'Sullivan stated "While the headline PMI moderated, it nonetheless signifies a solid rate of expansion. This robust order growth has had a clear impact on manufacturers' purchasing activity."
Sources: Investec, The Irish Independent
Assessing Ireland's global connectedness
The McKinsey Global Institute (MGI) recently issued a report, Capturing the value of Ireland's global connections, highlighting the strong connectedness of Ireland in the global economy. Ranking Ireland as the 14th-most-connected economy in the world, the report identifies the strengths and vulnerabilities of the economy as recovery takes hold. The report notes that while Ireland 'performs exceptionally well in terms of FDI', in an increasingly competitive environment policy makers and businesses 'will need to step up their efforts to remain globally relevant'.
Among other things, the report suggests prioritising Ireland's attractiveness beyond the corporate tax regime, capitalising on our strengths in technology and 'still-untapped digital potential', and competing for global talent. You can find the report here.
Source: McKinsey Global Institute
European Commission highlights Ireland's competitiveness
A recently released 'Industrial performance scorecard' from the European Commission has highlighted Ireland's competitive strengths. Ireland is one of four member states with high and improving competitiveness along with the Netherlands, Germany and Denmark. The report shows that the EU has experienced a recovery in exports and an increase in productivity in most Member States albeit that many factors still hinder competitiveness in Member States.
The report concludes that Ireland's 'domestic economy is growing and creating jobs again. Business - crucially including SMEs - and consumer confidence is returning. Ireland is successfully competing internationally and it has an excellent business environment'. A cautionary note is however sounded that 'further progress is required in several areas including fiscal consolidation, debt deleveraging, financial sector repair and structural reforms'. You can read more here.
Source: European Commission
Ireland's positive international reputation
The Reputations Agency and Reputation Institute have announced Ireland has been ranked in 13th position by the general public across the G8 nations, out of 55 countries surveyed in the annual Country RepTrak study. Switzerland is the country with the world's best reputation according to the study.
While Ireland has dropped one place from 12th place in 2013 to 13th place in 2014, it has improved its score, rising from 67.6 out of 100 in 2013 to 68.5 in 2014. Ireland was ranked ahead of the UK, Italy, France, Spain, Portugal and the US in the study. Ireland's reputation has significantly improved since it was ranked as low as 26th place in 2009. You can read more here.
Source: Reputations Agency/Reputation Institute
AIG has announced the establishment of its EMEA Treasury Operations Centre in Dublin. The Operations Centre will form part of the already established Dublin Investment Centre. Twenty treasury management positions in total will be filled in support of the new Dublin Treasury Operations Centre.
Citrix, a global leader in technology, has announced it will increase its Dublin workforce by 50 new employees by the end of 2014, meaning that the company headcount in Ireland will grow to 265 people. The open positions include roles in sales, IT shared services and technical support.
GENBAND, a leading developer of software-based real time communications solutions, has announced the relocation of its Galway-based International Business Services Centre headquarters to the Parkmore West Business Park in Galway. Speaking on the relocation, Daryl Raiford, GENBAND's Chief Financial Officer said "We had outgrown our previous location and our new facilities at the Parkmore West Business Park provides our local employees with state-of-the art business amenities and will allow us to accommodate future growth in our headquarters staff."
IBM have opened their European Digital Sales Centre at the IBM Technology Campus in Dublin. The investment, worth €20 million, will enable a new digital based system of engagement and transform the way in which IBM engages with clients and business partners. The Centre is IBM's largest multi-language client engagement centre worldwide, bringing together a specialist IT salesforce working in 19 languages and is a focal point for clients in 21 countries across Europe.
NuVasive, an innovative global medical device company, have opened their office in Waterford. The company announced up to 30 high skilled roles earlier this year. NuVasive are changing spine surgery with minimally disruptive surgical products and procedurally integrated solutions for the spine.
SolarWinds, a leading provider of powerful and affordable IT management software, expects to create up to 100 new jobs over the next two years at the company's Cork office. Its EMEA headquarters opened in 2007 in Cork and currently employs over 140 employees. In addition to expanding its workforce, SolarWinds has expanded its office space with an additional 7,100 square feet in City Gate, Cork City.
Stryker, one of the world's leading medical technology companies, has announced plans to construct a new 44,000 square foot surgical Innovation Centre in Cork. The company continues to expand its manufacturing operations in Ireland through a combination of investment in leading-edge technology and strategic operations. The construction of the facility will commence in Q4 and is due for completion by the end of 2015.
West Pharmaceutical Services, Inc. plans to expand its global manufacturing operations to include a new site in Waterford, Ireland. The new facility will produce packaging components for insulin injector cartridges and other high value packaging components, in order to meet growing demand from pharmaceutical and biotech customers. Once operational, this new site could bring approximately 150 new jobs to Waterford and is intended to grow to support additional jobs through expansions in the future.