Bernard Durkan (Kildare North, Fine Gael)
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Question 73: To ask the Tánaiste and Minister for Enterprise, Trade and Employment the action she proposes to take to improve the competitiveness in the manufacturing and service sectors with particular reference to the need to improve the position of Irish exports on world markets and enable the home based service sectors to compete more aggressively thereby facilitating economic revival; and if she will make a statement on the matter. [19876/09]

Mary Coughlan (Donegal South West, Fianna Fail)
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We have an open pro-enterprise and pro-business economy. Our manufacturing and services sectors are very successful on global export markets. Indeed, contrary to the impression given by some commentators, Ireland's export performance has been very impressive even during the current economic difficulties. Final data for last year – 2008, showed that Ireland's merchandise exports totalled €86.2bn (down 3% on the previous year) and our services exports were €67.6bn (up 3%). The country's total exports were therefore €153.8bn; a fall of less than 1% on 2007 and our trade surplus was a very healthy €21.4bn.

This was a very impressive performance, when account is taken of the global recession and the adverse exchange rate between the Euro and both the US Dollar and Sterling, as the US and Britain are our two largest export markets. In addition we have achieved considerable success in developing new markets, with significant export growth achieved to China (up 22%), Malaysia (up 53%), Saudi Arabia (up 10%), UAE (up 14%), Brazil (up 13%) and some of the new EU Member States.

Eurostat data shows that Ireland's share of EU exports increased from 2.2% for the quarter Nov. 07 - Jan. 08 to 2.5% for the same period a year later and in January 2009 it stands at 2.7%. A notable statistic is that the level of exports from the EU as a whole, actually fell significantly - down 23.9% in the quarter Dec 08 - Feb 09, so our performance is even more remarkable in that context.

However, current trading conditions for companies are difficult and challenging because of various issues such as the devaluation of sterling, tough competition, and the global recession. Some issues are outside the control of Government as a whole, but where possible and appropriate, we can address some key areas. We are addressing Ireland's cost competitiveness as an essential element of our economic recovery.

Recently published indicators are in our favour with inflation, commodity and other prices falling. The Consumer Price Index figures released last week are an indication of falling Irish prices in a number of areas, with Ireland showing the highest cut in prices. This brings Ireland closer into line with average EU prices, going some way towards restoring our overall cost competitiveness, but there is still a distance to go.

Under the Framework for Economic Renewal we are taking a number of measures across Government to address competitiveness objectives. A key element of the Government's current strategy to develop the enterprise sector is to encourage increased levels of investment in research, using more technology in product development and encouraging more innovation. "Building Ireland's Smart Economy" sets a clear agenda to help manage this change and build Ireland's comparative advantage for future economic growth in knowledge-intensive goods and services.

It is my intention to establish a Manufacturing Forum in the near future, in line with the recommendations of the "Report of the High Level Group on Manufacturing", launched in 2008. Furthermore, implementation of the recommendations of the Services Strategy Group's report "Catching the Wave: A Services Strategy for Ireland", will enable Irish service companies to exploit new and exciting opportunities, such as eLearning, business and financial services, professional and consultancy services and others. Some of these are already being acted on by the Enterprise Agencies.

The Government is focused on the factors that will drive our long-term competitiveness. Our policies to improve competitiveness have a long term strategic objective which will restore confidence to the business community and continue to improve the capabilities of the manufacturing and services sectors competing on both domestic and world markets, so that they are well positioned to take advantage of the global upturn.