Written Answers. - IDA Job Creation.
Eric J. Byrne
Ceist:
33
Mr. E. Byrne
asked the
Minister for Enterprise and Employment
if he will make a statement on the end of year statement of the IDA for 1993; his views on whether the net increase of 500 jobs created represents a satisfactory return for the £150 million of public funds received by the IDA; regarding the 15,700 jobs created through the IDA in 1993, the proportion that were contract jobs; and his views on the increasing use of contract workers in IDA-backed projects.
It is not appropriate to compare the jobs created in 1993 with the public funds received by IDA in that year. While some of the jobs created in 1993 were, of course, a consequence of investment made by firms in that year, most would have arisen because of investment in previous years.
A second point is that, while it is important to track net jobs, this does not, in itself, give a sufficient basis to evaluate whether a satisfactory return is being obtained from State support for industrial development — for example, it does not take into account replacement jobs lost, jobs protected or maintained, indirect employment and income effects, tax receipts and social welfare savings. In this connection, a recent ESRI report showed that manufacturing firms expenditure on Irish services is directly responsible for supporting an additional nine jobs in the services sector for every ten jobs in manufacturing.
As a consequence of natural market dynamics and competition faced by Irish based firms on domestic and international markets, there will always be some companies who become uncompetitive, lose business and reduce employment, either on a temporary or on a permanent basis. Clearly, jobs lost must be replaced before a net increase can be shown.
Based on the final results of their 1993 employment survey, I understand from the IDA that 15,642 gross jobs in the manufacturing and internationally traded service sectors were created in 1993. This gross jobs outturn is in line with IDA's contribution in 1991 and 1992 to the annual 20,000 gross jobs target in the outgoing PESP.
The net jobs outturn of 500 approximately in 1993 compares with an overall net loss in 1992 and effectively is the result of gross job losses being down significantly in 1993 compared with 1992. Taking account of the fact that manufacturing industry was faced with having to recover from the effects of the currency crisis and given the continuing recession in most of our main markets abroad, I think the net jobs outturn achieved by IDA in 1993 represented a creditable performance.
Clearly, a key element to improving the net jobs position in the future is reducing the job losses figure. In this connection, the Deputy will be aware that, arising from a commitment in the Programme for Government, I have established a competitiveness and employment protection unit within my Department to assist in this task. The Deputy will also be aware that, subject to a substantial improvement in the economic situation in our main markets abroad and levels of productivity and output in Ireland, similar to those which prevailed in the period 1988-1990 being achieved, theNational Plan 1994-1999 sets an overall target of 5,000 net jobs in the manufacturing and internationally traded service sectors for each year, on average, of the plan.
As regards the Deputy's query on con tract jobs, I am informed by the IDA that, based on their employment survey results, such jobs are not included in the 15,642 gross jobs referred to. I am advised by IDA that they survey separately jobs other than permanent jobs. This "other" category covers temporary, part-time and short-term contract jobs. I understand these are not disaggregated to yield separate data for each category. This is to avoid increasing the complexity of the survey and the need to complete it within a very tight time span. IDA's employment surveys show that in the period 1988 to 1993, the "other" category increased from 5.6 per cent to 8.3 per cent of overall employment in the manufacturing and internationally traded services areas. This reflects the pattern of recruitment by some companies, to allow them to respond flexibly to changing market circumstances.
