Billy Timmins (Wicklow, Fine Gael)
Link to this: Individually | In context

Question 70: To ask the Minister for Enterprise, Trade and Employment his views on the reason, despite an increase in export sales of €1 billion among Enterprise Ireland's client firms, there was a net job loss of 1,317 in 2004; and if he will make a statement on the matter. [6191/05]

Micheál Martin (Cork South Central, Fianna Fail)
Link to this: Individually | In context

Issues relating to job creation and retention in Enterprise Ireland client companies are day-to-day matters for the agency itself, and not one in which I am directly involved.

Enterprise Ireland informs me that the resurgence in the international economy was reflected in the increase in Enterprise Ireland client export sales during 2004. Irish companies delivered a solid performance during the year, delivering on the growth revival experienced in the latter part of 2003. Companies in the services and high-tech manufacturing sectors, namely, software, ICT, digital media, financial services and health care account for the majority of those increases in export sales, whereas companies operating in the more traditional manufacturing sectors such as food showed more modest increases.

The positive impact of international market improvements is reflected first in export sales, as illustrated in the €1 billion increase in export sales during 2004. However, the impact on employment can take several months and even years to be fully realised. Factors which influence the time lag include the time taken to recruit and train staff, secure significant international contracts and sales, locate and acquire a suitable site for the companies' operations, construct the facility and install plant and machinery.

Enterprise Ireland recorded a net fall in employment between 2003 and 2004 of 1,317. That reflects a 60% reduction in the net losses compared to the preceding 12-month period, based on strong performance of the high-tech sectors, in particular those companies supported under the Enterprise Ireland high-potential start-up division, as well as the many expansion projects undertaken by Enterprise Ireland-established client companies in the past number of years.

The majority of job losses — 90% of the total — recorded in Enterprise Ireland-supported firms occurred in the food sector, which is facing fundamental change largely driven by CAP reform and WTO negotiations. Ever-changing consumer preferences, rationalisation at retail and production levels, trade liberalisation and increased competition from lower-cost economies will present major challenges to that sector in the years ahead. Enterprise Ireland and other State agencies will continue to assist companies in the sector to increase competitiveness, undertake research and development into new products, and assist penetration into new export markets.