Damien English (Meath, Fine Gael)
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Question 109: To ask the Minister for Finance his views on the sluggish performance of Irish exports and the sustained decline in manufacturing employment and the threat which this poses to Ireland's continuing strong economic performance. [26672/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Preliminary data indicate that the volume of exports of goods and services declined by 0.6% year-on-year in the first half of 2005. This follows a relatively solid expansion of 7% in exports in 2004. There is considerable uncertainty surrounding the reasons for the subdued performance to date in 2005. Both goods and services exports have been weak. Industrial production, that is, goods data indicate that chemicals production in particular has been weak. Balance of payments data indicate that on the services side insurance exports have been weak. However, caution should be exercised in interpreting trends in export performance based on only a few quarters' data. Quarterly data is volatile and subject to revision. In addition, changes in production-operations patterns, in particular in multinational sectors, can in the short term result in volatility in export growth. Given the uncertainty surrounding export performance and its drivers in the short term, emerging trends in export performance will be carefully monitored on an ongoing basis.

Between Q1 2001 and Q1 2005 the numbers employed in manufacturing declined by 33,300, or 13.2%. However, this decline in employment in the manufacturing sector has taken place over a period when total employment increased by 197,400, or 11.5%. This indicates that some of the decline in manufacturing employment can be seen as part of a process of structural change in the economy. While manufacturing jobs are being lost, many jobs in high value added sectors such as financial services are being created. It is also the case that losses in competitiveness over the last number of years are placing pressure on manufacturing firms. It is for this reason that we must remain focused on restoring and enhancing competitiveness going forward if Ireland is to continue growing strongly.