Bernard Durkan (Kildare North, Fine Gael)
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Question 120: To ask the Tánaiste and Minister for Enterprise, Trade and Employment the action she proposes to take to reduce costs in the manufacturing and services sector; and if she will make a statement on the matter. [41265/09]

Bernard Durkan (Kildare North, Fine Gael)
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Question 121: To ask the Tánaiste and Minister for Enterprise, Trade and Employment the extent to which she has identified the main issues causing lack of competitiveness in the manufacturing and services sectors; her plans to combat these; and if she will make a statement on the matter. [41266/09]

Mary Coughlan (Donegal South West, Fianna Fail)
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I propose to take Questions Nos. 120 and 121 together.

Restoring Ireland's cost competitiveness has been a priority for the Government. Over the past few months we have seen significant downward pressure on costs and on prices generally.

Following significant energy price reductions in May 2009, from this October there has been significant reduction in gas prices and a modest reduction in electricity prices for medium business customers. Overall, all categories of businesses, including SMEs have benefited from significant energy price decreases in 2009.

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 per cent in the year to September 2009 — the sharpest fall in Ireland since the 1920s.

The ESRI recently predicted that, with our current control of costs, productivity should grow by over 3 per cent in 2010. Combined with projected wage decreases of 2.5 per cent, this represents a significant improvement in the competitiveness of the Irish economy.