Wednesday, 10 July 2013

Questions (16)

Caoimhghín Ó Caoláin

Question:

16. Deputy Caoimhghín Ó Caoláin asked the Minister for Jobs, Enterprise and Innovation the way job numbers, job losses and job creation figures correlated with exports over the past ten years. [33502/13]

View answer

Written answers (Question to Jobs)

In the period between Quarter 1 2008 and Quarter 1 2012 the economy experienced the loss of 321,000 jobs. Throughout this period, those sectors which rely mainly on trading in the domestic market suffered the greatest job losses. For example, the Construction sector directly accounted for over 150,000 job losses between 2008 and 2012, while 48,000 jobs were lost in the Wholesale and Retail sector.

The sectors which have proved most resilient in maintaining or increasing employment levels during the economic crisis are those which are engaged in exporting goods and services. In examining the relationship between exports and employment, therefore, it is more appropriate to examine exports and employment for companies supported by the enterprise development agencies – which focus on exports - rather than the economy as a whole.

These companies account for the bulk of Irish exports (80% in 2012) and directly employed 294,000 in 2012. They are indirectly responsible for a similar number of jobs in ancillary and support services.

Table 1 shows the numbers in employment in companies supported by IDA Ireland, Enterprise Ireland, Shannon Development and Údarás na Gaeltachta between 2003 and 2012. The value of exports in these companies over the same period is also provided.

The table shows a reasonable correlation between employment and exports in these companies throughout the period 2003-2012. When exports performed strongly in the period 2003 to 2007, employment in agency assisted companies grew, with 23,500 jobs added in that period. As exports declined between 2008 and 2009, employment fell sharply. In the period 2008 to 2010, 45,000 agency supported jobs were lost.

Exports recovered again in 2010 and grew significantly during 2011 and 2012. In the past two years, enterprise agency supported employment has increased by almost 17,000. This is a positive development, bearing in mind the time lag between export growth and employment growth. This lag effect is due to the fact that firms may be operating below capacity when exports start to grow, or that firms may be reluctant to increase employment until export gains are seen as long-term and sustainable.

There are also many variables that need to be considered in examining the correlation between employment and exports, including the constituent components of our exports which change over time as some sectors of the economy experience a decline and new sectors start to emerge and grow. It is notable that since 2002 Services Exports have increased from €37 billion to over €90 billion in 2012 and now account for almost half of total exports. Other variables include the competitiveness of our firms and the degree of labour intensity of various sectors, which in turn are influenced by technological and innovative improvements.

Table 1 – Agency supported companies: Employment and Exports 2003-2012

-

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Employment,

- 000

300.2

298.5

307.8

319.6

323.7

316.6

283.6

278.0

285.8

294.8

Exports -

€ billion

92.3

94.9

101.7

122.8

132.1

135.6

124.7

130.1

140.7

146.3 (est.)

Notes :

Data on exports is compiled by Forfás in the Annual Business Survey of Economic Impacts 2011 and captures data in respect of IDA Ireland, Enterprise Ireland, Shannon Development and Údarás na Gaeltachta.

Data on Employment is taken from the Forfás Annual Employment Survey.