Billy Timmins (Wicklow, Fine Gael)
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Question 157: To ask the Minister for Enterprise, Trade and Employment his expectations for the manufacturing sector in 2007; and if he will make a statement on the matter. [2606/07]

Bernard Durkan (Kildare North, Fine Gael)
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Question 1134: To ask the Minister for Enterprise, Trade and Employment if he has satisfied himself regarding the ability of the manufacturing here to compete on world markets; and if he will make a statement on the matter. [3041/07]

Bernard Durkan (Kildare North, Fine Gael)
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Question 1135: To ask the Minister for Enterprise, Trade and Employment if the cost base relative to manufacturing industry here is sufficiently competitive to ensure the continuity of the sector in the future; and if he will make a statement on the matter. [3042/07]

Micheál Martin (Cork South Central, Fianna Fail)
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I propose to take Questions Nos. 157, 1134 and 1135 together.

Ireland's strengths and competitive advantages have changed over the last decade, and our economy is now characterised by high output and productivity, together with high returns to labour in the form of wages, salaries and better living standards. Low technology production, which dominated our economic output in the past, is being replaced by higher technology and services enterprises. It is the case that manufacturing firms in the more traditional sectors have, in recent years, operated against a backdrop of significantly declining external demand, downward price pressure, and an increasingly competitive international environment together with upward pressure on costs and the strengthening of the Euro against our key trading partner currencies. There are areas of activity in which Ireland's competitiveness is seriously challenged and it is inevitable that, among the factors which influence the location decisions of companies, the competitive attractions of alternative geographic locations will figure.

Given the environment in which it must operate, Irish manufacturing has, in fact, performed quite strongly; CSO data indicates that manufacturing production by volume has increased by 28% overall between 2000 and 2005. The latest CSO Release on Industrial Employment, December 2006, indicates that employment in manufacturing increased by some 4,000 in the 12 months to September 2006.

While the changing nature of our economy has seen some losses, in contrast, the new jobs created in the enterprise development agencies' client companies in the last number of years are heavily concentrated in high-value added, knowledge-based companies that offer greater security in the face of intense international competition. Irish manufacturers engaged in specialised, sophisticated, high technology and value-added activities, and/or operating in non-commoditised markets (e.g. the medical technologies and chemicals sectors) can continue to compete successfully on international markets going forward. These sectors require specialised skilled staff, specialised technologies, flexible operations, and other factors that are not readily available in many low cost economies, such as modern Intellectual Property, IP, protection laws, a business friendly regulatory environment, etc.

One of my Department's main tasks is to ensure that Ireland remains an attractive place to do business, and to support the development of economic competencies higher up the value chain. In that regard, we continue to work to maintain and enhance our framework competitive conditions, and to promote new areas of competitive advantage, such as by developing our R&D base.

The enterprise agencies also aim to support sustainable, high value added enterprise in Ireland through the provision of mentoring and developmental supports, the enhancement of management capabilities and critical workforce skills in client companies, support for the creation and implementation of strategies for market entry, development and growth, and strong supports for innovation and for research and development.

My Department and the enterprise development agencies will continue to monitor and review the performance of the Manufacturing sector of the economy. While there are undoubtedly challenges to be addressed, I believe the sector will continue to be a significant contributor to exports, employment and economic growth in 2007 and beyond.