Made in Ireland

Made in Ireland

Highlights

  • The Irish economy is expected to grow by 3.5% this year
  • It remains the most popular place in Europe for major US companies, including Facebook and Apple, to set up shop
  • Financial services, IT, medtech and construction are major growth areas

Despite the ever-present possibility of geopolitic complications, the Emerald Isle is currently a great place to do business.

People don’t like to get too carried away with themselves when talking about the Irish economy. There is a temptation to play things down, in the same way that football managers do when they’ve had a 10-match winning streak and a grinning reporter suggests a league title might just be in their sights.

It’s because no one wants to tempt fate – especially when memories of the dark days of the economic downturn are still so fresh.

But there are reasons to be cheerful. Unemployment – which trebled between 2008 and 2012 – is almost back down to pre-crash levels, and Ireland is set to be the fastest-growing economy in the EU.

The ‘Celtic Tiger’ is out of its cage and on the prowl again.

Ireland’s place on the world stage

The International Monetary Fund (IMF) expects Ireland’s economy to grow by 3.5% this year and 3.2% in 2018. Those figures are a fraction lower than those of the Department of Finance (while also being lower than the extremely rosy 5% suggested by the Davy Group in May) but are still extremely robust compared to the UK, whose economy is predicted by the IMF to grow by 2%, and also the 1.7% that has been forecast for the Eurozone as a whole.

One of the reasons Ireland is outperforming the rest of Europe is, of course, that it remains the most popular spot in Europe for major US companies to set up shop. Much has been written about foreign direct investment (FDI) and Ireland’s place on the world stage – few putting it more eloquently than Dan O’Brien, chief economist at Ireland’s Institute of International and European Affairs, who wrote last year in the Guardian: “No one is under any illusion as to why they come and why they stay. They are not in Ireland for the small domestic market of 4.5 million people – they are here for the 500-million-person market that sprawls eastward all the way to Poland’s border with Ukraine.”

And still they come. Enterprise Ireland says the country is now the second-largest exporter of computer and IT services in the world, as well as being the preferred European data centre location for IBM, Microsoft, Google, Yahoo, MSN, and Adobe.

According to the American Chamber of Commerce in Ireland, the Republic has 150,000 people working for 700 different US companies. US investment since 1990 adds up to $343bn (€315bn), and the total rises each year. Interestingly, the love affair works both ways: Irish firms based in the US employ almost as many people as American firms do in Ireland.

Multiple sectors growing

Medtech is burgeoning, too, with Galway among several key hubs that hold a particularly hypnotic sway. The sector employs almost 30,000 people, and IDA Ireland, the national investment agency, states that exports of medical devices and diagnostic products now represent 8% of Ireland’s total merchandise exports. All of which makes the republic the second-largest exporter of medtech products in Europe, with €12.6bn in exports annually.

The financial services is also major player. Enterprise Ireland reports more than 25,000 people work in the international financial services sector in Ireland, and that €1.8trn of funds are administered here.

And that’s before we get on to more traditional industries. According to the Irish Times, Ireland’s construction sector grew by 15% last year and is expected to see 20% growth this year. The Construction Information Services’ (CIS) latest report for 2017 “provides clear evidence of upward momentum in the industry and shows signs of activity spreading beyond the Dublin and Leinster regions,” says its managing director, Tom Moloney. The report details more than 500 projects across all sectors that are either proposed or under way and total more than €17bn.

“One of the biggest differences we’ve noticed is Irish companies are hiring again. Those indigenous Irish firms, the beating heart of the economy, are starting to hire”

David Walsh, director of commercial development, Osborne

Whiskey exports are soaring, too, increasing by 8% in 2016 and, according to Bord Bia, the Irish Food Board, expected to double by 2020, fuelled by demand from Asia, Germany, and the US.

Ross MacMathuna, director of the Alcohol Beverage Federation of Ireland, says: “Irish whiskey exports have recorded a four-fold increase over the past decade, making it the fastest growing global spirits category. Over €1bn will be invested in Irish whiskey distillery projects between 2010 and 2025.” In 2013, he notes, there were just four distilleries in Ireland; today there are 16 in production, with a further 13 planned.

Aircraft leasing is another sector in which business is booming. According to the Irish Times, the aviation sector contributes more than €4bn to the economy – nine of the world’s top 10 lessors are headquartered in the republic, it states.

The Irish Independent adds: “Approximately 40% of the world’s commercial aircraft are not owned outright by airlines, but are leased, and forecasts show this figure will increase by 50% by 2020. More than half of these leased aircraft are owned and managed from Ireland.”

Trouble on the horizon?

There’s little doubt that Ireland has risen from the ashes of the recession – although The Economist suggested recently “Ireland may suffer most from Brexit”, pointing out that the recent weakening of the pound had already made exports to the UK less competitive. “The Irish government is seeking to salvage what it can,” it said. “IDA Ireland is redoubling its efforts to sell Ireland’s well-educated workforce and low corporation tax to foreign investors.”

Meanwhile, plans by the Trump administration to reduce business taxes so fewer US companies will set up bases in destinations with lower taxes could shake things up a bit, too. The US-based IrishCentral.com news site said: “While existing companies such as Apple, Google and Facebook are hardly likely to leave Ireland, new companies may be harder to attract.”

But that’s all in the future. Today, Ireland, unquestionably, is taking care of business.

“One of the biggest differences we’ve noticed,” says David Walsh, director of commercial development at Osborne, an award-winning recruitment agency with offices in Dublin and Drogheda, “is that indigenous Irish companies are hiring again. Between 2009 and 2012 it was the multinationals who were coming in and hiring, but we’ve noticed over the past three or four years that those indigenous Irish firms, the beating heart of the economy, are starting to hire.”

Given that recruitment trends are a pretty good barometer of what’s going on at the ‘coal face’ in any country, Walsh is perhaps as well placed as anyone to judge the lie of the land. “We’re lucky enough to speak to different people in different industries across the whole of Ireland,” he says, “and stuff’s happening. There’s an air of optimism out there.”

 

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Tuesday, 13 November 2018
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