Dáil Éireann Debate, Wednesday - 12 October 2016
96. Deputy Niall Collins asked the Minister for Jobs, Enterprise and Innovation further to Parliamentary Question No. 1905 of 16 September 2016, if she will provide details of the data used in the employment multipliers derived from sectoral multipliers applied to IDA client firm employment data, including type II multipliers, used by her Department in making forecasts in Enterprise 2025; and if she will make a statement on the matter. [30000/16]
Amharc ar fhreagraForeign direct investment helps to develop capabilities and critical mass in sectors and to enhance Ireland’s innovative capabilities. It also contributes to greater productivity and value added as well as to regional economic development. IDA Ireland client firms created almost 19,000 direct gross new jobs in 2015, resulting in a net of 11,833 jobs (when job losses are taken into account). This has been an excellent performance coming on the back of a deep economic downturn and continued international uncertainty.
The exporting sector, including foreign owned multinationals operating from Ireland to serve international markets, impacts on the wider economy through re-invested profits and expenditure of wages, materials and services. It also generates significant downstream effects in areas such as sub-supply and secondary employment. This impact can be calculated in terms of a multiplier. The value of the multiplier depends upon the percentage of extra money that is spent within the domestic economy.
The employment multipliers are derived from the Supply and Use and Input-Output tables for the Irish economy published by the CSO and cover all sectors of the Irish economy. Sectoral multipliers for employment are derived from these tables and then applied to IDA client firm employment data. The employment multipliers used include direct, indirect and induced impacts of IDA client firm activity (known as Type II Multipliers), taking account of demand on the suppliers as well as induced impacts arising through the additional consumption that takes place as a result of the additional employment incomes created through the indirect impacts. Type II Indicators should be interpreted with caution, as they assume that all additional income generated through indirect employment is spent.
Employment multipliers are best estimates and may be subject to small changes over time based on structural adjustments in the economy and the composition of the IDA client firm base. Recent research as input to Enterprise 2025 indicates the multiplier for IDA client firms is eight indirect jobs for every ten direct jobs.
Analysis of Employment Multiplier Impacts of IDA Ireland assisted firms’ employment
|
Food, drink and tobacco |
2.55 |
|
Chemicals & Pharmaceuticals |
1.65 |
|
Medical device Mfg |
1.88 |
|
Computer, Electronic… |
1.39 |
|
Other Mfg |
1.47 |
|
Computer Programming |
1.99 |
|
Computer Consultancy |
1.99 |
|
Business Services |
1.64 |
|
Financial Services |
2.42 |
|
Other Svcs |
1.98 |
|
Total |
1.84 |
Based on Forfás ABSEI and AES data (2013) [export sales employment] and CSO Input-Output and Supply and Use Tables (2011) (Indecon analysis)
The employment multipliers are Type II and include both indirect and induced impacts.
The multiplier is derived through the ratio of the addition of the individual sectoral economy-wide impacts to the total IDA direct employment.
