Written Answers. - Forfás Report.

Mary O'Rourke

Question:

602 Mrs. O'Rourke asked the Minister for Enterprise and Employment the action, if any, he proposes to take following the recent Forfás report which stated that 70 per cent of job losses are due to firms contracting and reducing employment. [16987/96]

The Forfás report Job Losses Arising from Closures and Contractions examines data in this regard over the period 1991 to 1995. Among the report's key findings is the decline of company closures and contractions in the period and the fact that contractions were more than twice as significant than closures as explanations for permanent job losses. The report points out, moreover, that this is in line with the present experience of industry across Europe and is due to competitive responses — increased productivity, rationalisation and market responses — on the one hand, and competitive difficulties — inability to compete with low cost producers, difficulties in raising finance, management deficiencies and the weakness of sterling — on the other hand.

Traditional industrial sectors, such as clothing and footwear, and the manufacturer of computer peripherals are the most exposed in terms of competitive difficulties and the report offers no immediately actionable solutions to the global problems in those areas. However, a number of initiatives under the industrial development programme, the human resources programme and the small business programme will contribute to significant change in the capability of Irish industry to adjust to new market realities, compete more vigorously on world markets, raise the necessary finance and manage the process of industrial change more effectively. Moreover, I will be publishing a major statement on enterprise strategy before the end of the year which will set out, in particular, the future shape and direction of policy and action on the needs of Irish indigenous industry. Part of the focus of the new approach will be closer attention by Forbairt to the adjustment needs of firms facing the most intense competition and the consolidation of assistance around key problems of competitiveness such as those identified in the Forfás report.