Micheál Martin (Cork South Central, Fianna Fail)

The manufacturing sector in Ireland has evolved noticeably since 2000 in terms of the composition of industry and the nature of activities and is likely to continue to do so. Manufacturing continues to be a significant employer accounting directly for 11% of total employment and a significant amount of associated services employment. In order to sustain and grow the sector, the Irish-based manufacturing enterprises will have to continue the progression to high value-added sectors and activities and continue to increase productivity through investments in human capital, technology and innovation. Irish manufacturers who engage in specialised, sophisticated, high technology and value-added activities can continue to compete successfully on international markets. These sectors require specialised skilled staff, specialised technologies and flexible operations and other factors which are not readily available in many low cost economies, such as modern intellectual property protection laws, a business-friendly regulatory environment and so forth.

The latest available data on manufacturing employment are those compiled by the Central Statistics Office in its earnings and labour costs release, published in March 2008. This release indicates that at quarter three 2007 there were 227,300 persons employed in the manufacturing sector, which represents a small decrease of 700 on the numbers employed in the corresponding period in 2006. It is important to keep this in perspective both in terms of global economic conditions and the continued strength of the euro. Our manufacturing sector continues to perform strongly and 2007 represented a very good year, with production growing by 7.5%, the highest annual change since 2002.

Over the last number of years there has been a significant churn in employment as is typical of a developed, open and dynamic economy such as Ireland's. Ireland is no longer a low cost economy and manufacturers in particular are facing increased competition from producers in lower cost areas. Nevertheless, Ireland continues to attract high-value manufacturing activity as evidenced by recent announcements by companies such as Zimmer, Green Isle Foods, Thermo King and others to establish or expand their facilities in Ireland. Other sectors, especially the services sector, are providing significant new employment opportunities. Since 1997, over 500,000 new jobs were created in Ireland and the number in employment now exceeds 2.1 million.

Additional information not given on the floor of the House.

As part of the commitments included under the partnership agreement Towards 2016, I established the high-level manufacturing group to review the challenges facing the manufacturing sector and to identify further measures to meet those challenges. The group's report, which was published earlier this month, contains 27 recommendations directed at key areas of innovation and productivity leading to transformational change, reskilling and management development for the innovative firm, increasing awareness and the take-up of existing supports. In addition, the group recommends the establishment of a manufacturing forum to take responsibility to progress the implementation of the recommendations outlined in the report and to act as a strong advocate and champion for the manufacturing sector to ensure that manufacturing remains central to current and future industrial policy. Follow-up to the report will be discussed with the social partners as part of the review of Towards 2016.

The programme for Government contains a range of commitments focused on maintaining and enhancing our framework competitive conditions and promoting new areas of competitive advantage, including developing our research and development base, investing in critical physical and communications infrastructures and promoting tertiary education and lifelong learning. Over the period of the national development plan, the Government will provide total investment of over €25 billion which will be of direct benefit to the enterprise sector, including manufacturing. A total of €8.2 billion is earmarked for the strategy for science, technology and innovation to assist in achieving our goal of becoming a leader in research, development and innovation. An investment of €3.3 billion will specifically support the development of the indigenous and foreign direct investment enterprise base, while €13.7 billion will be devoted to skills development.

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