Dáil Éireann Debate, Wednesday - 22 May 2013
136. Deputy Bernard J. Durkan asked the Minister for Jobs, Enterprise and Innovation the extent to which his Department continues to monitor the competitiveness of the manufacturing sector here with particular reference to the need to effectively compete with other economies throughout Europe and globally; and if he will make a statement on the matter. [24772/13]
View answer137. Deputy Bernard J. Durkan asked the Minister for Jobs, Enterprise and Innovation the extent to which his Department has identified issues affecting the competitiveness of the manufacturing and service sectors here; the extent to which any imbalances can be addressed by way of utilisation of innovation, science and technology; and if he will make a statement on the matter. [24774/13]
View answer142. Deputy Bernard J. Durkan asked the Minister for Jobs, Enterprise and Innovation the extent to which the manufacturing and service sectors here have managed to access EU grant aid incorporating science and innovation technology; and if he will make a statement on the matter. [24780/13]
View answer143. Deputy Bernard J. Durkan asked the Minister for Jobs, Enterprise and Innovation the extent to which he has received communication from the manufacturing and service sectors in regard to renting costs with particular reference to the impact of upward only rent reviews; the extent to which this issue has been identified as a serious impediment to job creation; and if he will make a statement on the matter. [24783/13]
View answerI propose to take Questions Nos. 136, 137, 142 and 143 together.
Following an initiative which I undertook last year, in the context of the Action Plan for Jobs, where I asked Forfás to undertake a detailed strategy for the Manufacturing Strategy in Ireland up to 2020, I was delighted to have had the opportunity last month to launch that finalised strategy, which sets out a range of steps necessary to consolidate and develop that sector.
This report sets out the actions needed to address cost competitiveness and access to finance – building on the steps already taken by this Government to improve our international competitiveness. Key actions are proposed across a range of areas, including; access to new funding, management training and support, costs reduction, technology adoption and the implementation of a National Step Change initiative.
In terms of addressing our Competitiveness issues, Ireland’s cost competitiveness can be improved in two ways: through reductions in costs nationally; and/or at firm level through improvements in productivity. Encouragingly, a key finding in this Strategy has been that productivity in manufacturing has been increasing over recent years – annual average growth rates in per hour labour productivity across manufacturing sectors amounted to 5.6 per cent over the period 2007 to 2010 - enhancing the competitiveness of Ireland’s manufacturing firms on international markets. By implementing these actions and building on progress made to date, I believe that this will lead to a more vibrant sector with enhanced prospects for additional job creation in a wide range of skill levels.
Ireland currently has a very diverse range of manufacturing businesses with many exciting and innovative companies in high-technology and emerging sectors. We are well placed to take advantage of our current position to build on this expertise in both the FDI and indigenous companies. There are very exciting opportunities in sectors such as Food, Pharma/Biopharma, ICT Hardware, Medical Technologies and Engineering. Utilisation of Innovation Science and Technology will be crucial in pursuing competitiveness for the industry.
It is, of course, the case that many of the Competitiveness issues faced by the Manufacturing Sector are similar to those facing businesses generally. In a separate initiative last year, I requested Forfás to undertake research into a number of factors impacting on Ireland’s international competitiveness, to benchmark these factors and to develop proposals to systematically reduce excessive key business costs or delays.
That wider Forfás research indicates that in the period between January 2000 and April 2008, Ireland suffered a 22.5% loss in competitiveness. However, in the period from April 2008 to July 2012, Irish cost competitiveness improved by 19% as measured by the Harmonised Index of Consumer Prices. Prices have now fallen back to levels last seen in 2002. The research benchmarks Ireland’s performance against a number of our key trading partners, as well as the OECD and Euro area averages. Positive trends are emerging in relation to some key cost factors, including Labour costs, where our labour cost competitiveness continues to improve; Construction and new rental costs, which have fallen significantly since the collapse of the property bubble; and the cost of most business services, which have fallen to, or below, 2006 levels.
The provision of adequate and appropriate finance for both the manufacturing and services sectors is crucial, but as you will appreciate, EU grant aid is a less significant factor now than in former years. Obviously all potential sources of grant aid are pursued. In relation to property rental issues for the sector, the Manufacturing Development Forum, who advise me on relevant issues relating to manufacturing, have not highlighted the impact of upward only rent reviews as a serious impediment to their operations.
