Dáil Éireann Debate, Wednesday - 3 February 2010
167 Deputy Bernard J. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment the action she has taken or proposes to take to bring competitiveness in the manufacturing, commercial and service sectors into a more competitive position in respect of adjoining or EU jurisdictions; and if she will make a statement on the matter. [5554/10]
View answerCompetitiveness is a multi-stranded issue. As well as consumer prices, labour and other business costs, productivity-enhancing investment in key areas such as infrastructure is vital. Ireland has consistently been regarded amongst the most competitive economies in the world for supporting enterprise. Reports such as the ‘IBM Global Location Trends Annual Report 2009', published in October of last year, ranked Ireland 1st for attracting FDI on a per capita basis. They listed our key strengths in services and R&D as the reason for topping the list. Similarly, the World Bank's ‘Ease of Doing Business 2010' ranks Ireland 7th out of 181 countries, unchanged from a year previously. Last week Ireland was ranked the third most globalised nation, according to an index published by Ernst & Young at the World Economic Forum in Davos.
Macroeconomic forecasts included in December's Budget indicate that prices will continue to fall in 2010. Labour costs have fallen in both the public and private sectors in recent months. In its recent report, "Ireland's Competitiveness Challenge", the National Competitiveness Council noted that "quarterly unit labour cost data from the OECD for Q2 2009 suggests that Ireland's relative cost competitiveness improved driven by the industrial sector". In recognition of these trends, the latest European Commission forecasts for Unit Labour Costs show Ireland's competitiveness in this area is expected to improve considerably relative to the European average over the forecast period. Energy costs have also fallen over the past year. The drop in industrial energy prices in Ireland in the twelve-month period to June 2009 was the third largest in the EU. Elsewhere, 22 out of 27 EU countries experienced increases on industrial energy prices over the same period. In fact, the rate of decline in gas prices for industrial users fell by almost 16%, double the European average. A report by Sustainable Energy Ireland (SEI) published on January 24th, showed that gas prices are now 7 per cent to 10 per cent below the EU average in the two main consumption bands for business.
These two elements will reduce the burden on enterprise in the coming year and improve competitiveness. Ireland continues to invest heavily in infrastructure, which is recognised as a key pillar in sustaining and improving competitiveness. At 5% of Gross National Product, the 2010 allocation of €6.4 billion is proportionally very high in comparison to levels of capital investment across the EU.
In relation to other EU Member States, Ireland's competitive position is improving. Releases from Eurostat (the EU's statistical office) show that price levels (HICP) in Ireland are improving relative to the European average. Similarly, EU Commission macroeconomic forecasts show that key competitiveness indicators such as Unit Labour Costs see Ireland's competitiveness improving in the medium-term.
