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Job Creation

Dáil Éireann Debate, Thursday - 10 October 2013

Thursday, 10 October 2013

Questions (95, 96, 101, 102, 103)

Bernard Durkan

Question:

95. Deputy Bernard J. Durkan asked the Minister for Jobs, Enterprise and Innovation the extent to which his Department has studied any contributory causes to job losses in the manufacturing sector in the course of the past eight years; if costs have been a factor; if so, to what extent and the precise elements of same; and if he will make a statement on the matter. [42937/13]

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Bernard Durkan

Question:

96. Deputy Bernard J. Durkan asked the Minister for Jobs, Enterprise and Innovation in the context of the total number of extra new jobs created in each of the past two years to date, the extent to which innovation and technology played a part, in respect of both manufacturing and services sectors; and if he will make a statement on the matter. [42938/13]

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Bernard Durkan

Question:

101. Deputy Bernard J. Durkan asked the Minister for Jobs, Enterprise and Innovation if he will set out year on year the total number of jobs lost throughout the economy, in both manufacturing and services sectors, in each of the years 2007 to date; the number of new jobs created in each year over the same period; and if he will make a statement on the matter. [42945/13]

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Bernard Durkan

Question:

102. Deputy Bernard J. Durkan asked the Minister for Jobs, Enterprise and Innovation the extent to which his Department continues to monitor the cost base in respect of manufacturing and services industries; the action, if any, taken to address any such issues; and if he will make a statement on the matter. [42946/13]

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Bernard Durkan

Question:

103. Deputy Bernard J. Durkan asked the Minister for Jobs, Enterprise and Innovation the total number of jobs lost in County Kildare in manufacturing and services in each year from 2006 to date; the number of net new jobs created in the same period in respect of both sectors; and if he will make a statement on the matter. [42947/13]

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Written answers

I propose to take Questions Nos. 95, 96 and 101 to 103, inclusive, together.

The most up to date figures available for job creation in the manufacturing and services sector are included in the Forfás Employment Survey 2012. There is no data available on a month to month or county basis for each of these sectors in the survey.

Please see the following table setting out the breakdown of Job gains and losses as requested.

While manufacturing has been an important sector in Ireland since the 1960s, there has been a noticeable decline in numbers employed in this sector. This is not necessarily surprising, and it echoes what has been happening in most developed economies. A similar trend has also been experienced in other industrialised countries such as Germany, UK, USA, Netherlands and Korea. We still have 205,000 directly employed in manufacturing here and, when account is taken of indirect employment that means about 400,000 depend on manufacturing for a livelihood. This impressive statistic highlighted the need for action.

Hence the initiation by me of two research projects - Forfás's "Making it happen Manufacturing 2020" and "The Future Skills Needs of the Manufacturing Sector to 2020" published by the Expert Group on Future Skills. Both of these reports complement each other and will assist Government in reaching the target of creating an additional 20,000 jobs in manufacturing by 2016.

The Action Plan for Jobs 2012 also included a series of actions for the Manufacturing Sector and noted that Ireland is well positioned to exploit the advances in manufacturing technology, and to build and maintain a strong base of manufacturing activity. 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.

The 2013 Action Plan for Jobs also outlines a range of sectoral initiatives to facilitate new and established companies to grow in the Services sector with particular focus on International Financial Services, Business Process Outsourcing/Shared Services, Education Services, Retail and Wholesale, Tourism, Construction Services and ICT Services.

In respect of the contribution of innovation and technology to job creation in these sectors, my Department, and the relevant State Agencies under its remit, have a clear and steady focus on the potential and opportunities that exist and can be created by prioritising innovation as a key driver of success. Enterprise development agencies, Enterprise Ireland, IDA and Science Foundation Ireland, provide a spectrum of innovation and technology development programmes that deliver financial, technical and experiential support to help companies become more innovative, encourage and support competitiveness, and help them grow their sales and exports in order to create a climate in which sustainable employment will grow and expand. It is not possible to separate out the precise contribution of innovation and technology elements from other factors.

All of our businesses face similar Competitiveness issues including the manufacturing and services sector. It is clear that, arising from greater globalisation, reduction of tariff barriers and the ease of transporting goods, the nature of industry and the location of specialisations will be changing. There will be an inevitable movement of production of lower cost, less specialised goods towards cheaper labour economies, e.g. in Asia. This is part of a wider global pattern.

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 numbers employed in manufacturing have stabilised over the last two years. It is noteworthy that exports of manufactured goods are continuing to rise despite a difficult environment. Even more heartening is the fact that exports by the Services sector are going from strength to strength, with an 11% increase in the first nine months of 2012. In addition the contribution of manufacturing to GDP has risen significantly over the last decade.

Despite the considerable challenges in an internationally competitive environment, there is considerable potential for the manufacturing sector in Ireland, as we are strongly placed to create opportunities and employment in many higher-value sub sectors, for example chemicals, pharmaceuticals, medical devices and food, amongst others.

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.

I am confident that all these measures, combined with other Government initiatives, including those to improve Competitiveness generally, will provide strong practical support to these important areas resulting in job creation.

The total number of jobs lost and gained, and the total of net new full-time jobs created in agency supported manufacturing companies, for the period 2006-2011 is set out as follows.

-

2006

2007

2008

2009

2010

2011

2012

Job Gains

34,497

28,888

 23,664

  13,962

 20,388

21,038

10,704

Job Losses

-21,369

-24,099

 -30,351

-47,325

-25,802

-16,599

-7,987

Net Change

13,128

4,789

-6,687

-33,363

-5,414

4,439

2,717

The following provides details of gains and losses in the services sector in agency supported companies.

Gains

-

2006

2007

2008

2009

2010

2011

2012

Job Gains

11,527

10,254

9,078

5,162

9,025

8,723

16,949

Losses

-

2006

2007

2008

2009

2010

2011

2012

Job Losses

-5,663

-7,356

-7,267

-12,973

-7,511

4,970

10,161

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