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Despite significant global economic headwinds, FDI continues to prove resilient in Ireland

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Despite significant global economic headwinds, FDI continues to prove resilient in Ireland

Despite significant global economic headwinds, FDI continues to prove resilient in Ireland
July 07
09:27 2022
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IDA Ireland, the inward investment agency of the Irish Government, has reported significant investment growth in the first half of 2022, returning FDI (foreign direct investment) employment creation plans to above the pre-pandemic 2019 record levels, despite a continuing challenging global environment. 155 investments were won, with associated employment potential of over 18,000 jobs. 73 were new name investments. 73 of the 155 investments won went to regional locations.

Several investments approved and announced in the first half of the year involve large job numbers and significant capital investments.

Speaking at the launch of IDA Ireland’s 2021 Annual Report, Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar said: “These are incredible results. We had a record year last year for foreign direct investment and now, today, we see that we’ve exceeded that again in the first six months of the year with investment up 9% on last year. That’s around 18,000 new jobs. Given everything that’s happened over the last few years, that really is remarkable.  It’s showing no sign of slowing down.  We should never forget that the jobs and revenue created by multinationals helped to keep us out of recession when the pandemic hit and are now giving us the financial firepower to ease the cost of living crisis and avoid recession once again.

“We’ve worked hard to create a welcoming environment for FDI in all parts of the country and the strong regional spread of jobs and investment in today’s results demonstrates government policy, with 73 of the 155 investments outside of Dublin. We want long-term sustainable jobs, work that pays better, in every county in the country.

“However there is a word of caution in these figures too. With inflation, Putin’s war on Ukraine, increased international competition for FDI and climate change and digital technology creating the impetus for rapid and transformational change, we cannot afford to be complacent. We never take this investment for granted and will continue to work hard to remain an attractive location for investment in the years to come. We are currently reviewing our overall enterprise policy, which has been a resounding success to date, and will continue to constantly self-evaluate to make sure we remain competitive and an attractive place to create jobs.”

Martin Shanahan, CEO of IDA Ireland, said: “These are very strong half year results achieved against a backdrop of a global pandemic, Brexit, considerable geo-political uncertainty globally, inflationary pressures, supply chain challenges, climate change and energy issues and, since the start of the year, Russia’s invasion of Ukraine. It shows the endurance and strength of the FDI sector with 155 investments approved so far this year compared to 142 for the same period in 2021. The associated employment potential is up significantly, at over 18,000, compared to over 12,530 in H1 2021. Both investments and employment potential are now ahead of 2019 pre-pandemic levels. It’s proof that our strategy of continuing to concentrate on core sectors of focus, which have proven durability, is the correct one.  Winning investments for regional locations across Ireland is another key focus for IDA and once again, in the first half of 2022 we see it yielding very good results, with 73 of the 155 – that’s 47% of investments – approved for outside of Dublin.”

Ireland’s existing base of foreign direct investment is a core national asset that cannot be taken for granted. The benefit of FDI, as outlined in the IDA’s annual report 2021, shows the many contributions that FDI makes to the economy, including direct and indirect employment, 72% of export sales, 70% of corporation tax, and direct expenditure on pay, materials and services totalling €27.9 billion.

Martin Shanahan spoke of the importance of client companies, without whom there would be no investment, and also acknowledged the support of Government, the Department of Enterprise, Trade and Employment and IDA teams in Ireland and overseas.

The CEO added: “Notwithstanding the serious global challenges and uncertainties on the path ahead, FDI is well placed to remain a vital contributor to Ireland’s prosperity and future success. Threats remain from a resurgence of Covid-19, the high level of risk and uncertainty in global markets, despite improvements in the global outlook.  Volatile markets, the future trajectory of the Russia-Ukraine war, inflation and monetary policy, ongoing disruption to global supply chains, UK-EU tensions and geopolitical developments are adding to the uncertainty in the global FDI environment.

“Investors commitment to Ireland remains strong. The country’s value proposition as a place in which to do business remains, as evidenced by these results, a compelling one. As we seek to lay the foundations for continued growth and transformation in the FDI base in the years ahead, our success will depend on progress towards enhancing the carrying capacity of the economy in the immediate and medium-term. The key areas requiring attention remain Planning, Housing, Energy, Water and wider infrastructure. Policies that support the continued availability of talent are also critical. Managing costs in the current inflationary environment and executing on planned capital projects will be challenging, but important for Ireland’s continued competitiveness.”

Martin Shanahan has advised the Board of IDA Ireland of his intention to step down from his role as CEO at a date to be agreed in early 2023. In due course, the Board will commence the process of undertaking an international search for a new CEO of IDA Ireland.

CAPTION:

Frank Ryan, Chairman of IDA Ireland; Mary Buckley, Executive Director of IDA Ireland; Tánaiste Leo Varadkar and Martin Shanahan, CEO of IDA Ireland; pictured at the launch of the mid year review

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