Written Answers. - Official Trade Statistics.
Michael McDowell
Question:
42
Mr. M. McDowell
asked the
Minister for Enterprise and Employment
if he has satisfied himself that the official trade statistics for 1994 give a true and accurate picture of what is happening in the Irish economy in view of the fact that a small group of foreign-owned companies accounted for up to 90 per cent of the £2.96 billion growth in merchandise exports last year, with software exports alone rising in value by over £500 million; and if he will make a statement on the matter.
[14435/95]
The accuracy of the official trade statistics is a matter for the Central Statistics Office and the Minister for Tourism and Trade in the first instance.
The continued high sales and exports growth rate of the overseas owned sector in Ireland is reflected in the 1994 trade statistics. I am satisfied that this growth does have a real and substantial impact on the Irish economy, raising GNP, and creating employment throughout the economy. Evidence for this view is contained in the Forfás Irish economy expenditure survey which shows that over the 1987-93 period the sales of IDA Ireland companies, which comprise the bulk of overseas industry in Ireland, grew by 62.6 per cent in real terms, but their expenditures in the Irish economy comprising wages-salaries, Irish produced raw materials and services, and corporation tax payments grew even quicker, by 74.1 per cent. Therefore, the proportion of overseas companies sales retained and benefiting the Irish economy rose from 32.6 per cent in 1987 to 34.9 per cent in 1993 and it is quite likely that the continued strong growth in sales and exports among overseas companies in 1994 had led to a commensurate increase in value added accruing to the Irish economy, and the support of employment throughout the economy.
Specifically in relation to linkages and the purchases of Irish materials, the Irish raw materials purchases of IDA Ireland companies rose from 15.7 per cent in 1985 to 21.5 per cent in 1993. The rise in real terms over the period 1987 to 1993 was £492 million. This rise represents a substantial gain in Ireland's market share of the sub-supply opportunities provided by the overseas firms located here. However, there is a real potential for Irish firms to increase their supplies to overseas companies located in Ireland even further. Forbairt has continued its two-pronged approach of obtaining information about the needs of overseas companies and the ability of Irish companies to meet these needs. It has recently expanded its link activities.
Until mid 1994, all Forbairt's link executives were based in Dublin. At that time, as a result of a review of the effectiveness and success already achieved, it was decided to regionalise them. The primary objectives in this were to take on board many more supply companies than was possible before, to directly assist these companies to make significant improvements in their capability and in their competitiveness and to scan a much wider range of multi-nationals in pursuit of attractive business opportunities for regional indigenous companies.
Under regional linkage considerable resources are being added through the appointment of locally based regional executives. The regional executives are supported by a core unit in Dublin which will co-ordinate the individual regional activities thus ensuring balanced national coverage and the best possible exploitation of all linkages opportunities. The core unit will also provide specialist advice on the major purchasing sectors.
In addition, the Forfás update of a study by the ESRI shows that on average in 1993 every direct job in IDA Ireland companies generated an additional job elsewhere in the economy through their purchase of Irish produced services, spending of wages/salaries and the Government tax revenue generated. In addition, it is estimated that for every 100 direct IDA Ireland jobs an average 17 jobs are supported indirectly through purchases of raw materials and components from Irish owned companies.
An industry panel comprised of purchasers and suppliers in each region advise Forbairt on how the effectiveness and the regional efforts can be increased. One result of this to date has been the development of the programme for international competitiveness which is targeted at bringing the capability of local indigenous suppliers up to the level necessary to compete successfully in the world marketplace. During 1995 the regionalisation process is being extended to all regions following the initial launch in the west region in 1994.
Finally, in addition to the overall impact of foreign companies, total employment in these companies has increased substantially by 5,300 in 1994 — from 77,300 people in 1993 to 82,600. A total of 9,740 new jobs were created and recruited in 1994. Job losses were at their lowest level since 1990 at 4,470.
