Joe McHugh (Donegal North East, Fine Gael)
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Question 182: To ask the Tánaiste and Minister for Enterprise, Trade and Employment if she will respond to matters (details supplied); and if she will make a statement on the matter. [38662/09]

Mary Coughlan (Donegal South West, Fianna Fail)
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In the current global economic climate, multinational companies are restructuring their global operations leading to global job cuts. Ireland therefore will inevitably be affected. On a daily basis, IDA Ireland is working with its client companies making every effort to keep their operations in Ireland and minimise job losses.

Despite this, Ireland continues to be an attractive location for FDI. To date this year IDA has already had a significant number of new investment projects approved and announced. There have been 44 announcements with a combined investment of €622.5 million and the potential to create 2,560 jobs. These investments are spread right throughout the country. It is encouraging that so many companies are prepared to undertake and announce these investments in Ireland given the current global economic environment. With the global outlook for 2010 looking more optimistic Ireland's improving competitiveness position should help IDA to make a significant contribution to economic recovery and continue to secure FDI for Ireland.

It is the view of this Government that controlling pay costs, both in the public and private sector, is a key element in restoring competitiveness. The Central Bank recently highlighted how our deterioration in international wage competitiveness threatens a quick return to economic growth. Although it will be a painful adjustment, a reduction in unit labour costs will strengthen our longer-term competitiveness. For most exporting firms, labour costs account for more than half their input costs. Both the NCB Manufacturing and Services Purchasing Managers' Indices have shown a sustained and deep period of declining input costs for businesses in Ireland, driven, in part, by lower wage costs. This is matched by a decline in Irish inflation that reached minus 6.5% in the year to September 2009 - the sharpest fall in Ireland since the 1920s. This deflation also cushions against the effects of any nominal wage declines. These indicators emphasise how we are meeting the challenge of restoring competitiveness through the primary means at our disposal – strict control over costs by all key players in Ireland's economy. With the OECD predicting mild deflation in Ireland for the next two years, the prospects are good for maintaining the current downward pressure on wages and prices. In addition, I should point out that the national minimum wage directly affects only about 5% of full time workers and has little direct impact on Ireland's international competitiveness as the number of persons on the national minimum wage in our internationally traded sectors in likely to be low.