Bernard Durkan (Kildare North, Fine Gael)
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206. To ask the Minister for Enterprise, Trade and Employment the extent to which he continues to monitor challenges to the manufacturing of the service sectors here, with particular reference to ensuring continued maximum levels of employment and high production and marketing standards; and if he will make a statement on the matter. [51750/23]

Simon Coveney (Cork South Central, Fine Gael)
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My Department continues to monitor challenges to the manufacturing and services sectors of the economy. With an unemployment rate of 4.8% in September, the Irish economy has been operating at a level close to full employment for quite some time. The risks to employment will depend on the risks to the economy, more broadly. Added to this, Irish GDP grew by 13.6% in 2021, and 9.4% in 2022, therefore, a moderation in economic growth might naturally be expected. A moderation in growth is also forecast in the Economic and Fiscal Outlook published as part of Budget 2024 which projects Real GDP growth of 4.5% for both 2024 and 2025.

As set out in Budget 2024, risks to the near-term economic outlook are tilted to the downside. The rise in interest rates, which the ECB does not expect to cut before Summer 2024, would be expected to dampen international economic growth rates. Given the open nature of the Irish economy, a slowdown in international growth may lead to more moderate rates of growth domestically. Cyclicality in demand can also have implications for sectoral economic growth - such as demand for pharmaceutical products which had seen significant growth during the COVID-19 pandemic and bolstered Irish exports during that period. As an open economy we are also aware of the risk which any rise in protectionism internationally presents.

Cost inflation can have significant impacts on the ability of the manufacturing and services sectors to compete internationally. However, Ireland has shown its strong ability to compete internationally, evident in our ranking of 2^ndin the IMD World Competitiveness Rankings this year from a total of 64 countries. This ability to compete is also evident in the continued resilience of the Irish economy at a challenging time for the global economy.

Manufacturing in Ireland is one of the critical sectors of the Irish economy with clusters of world class manufacturing operations in sectors such as biopharmaceuticals, engineering, medical technology, building materials, and food production. There were 317,200 people employed in the industry sector and although there was a decline in Q2 2023 compared to the same period of time last year, overall, there were more people employed in the industry sector than prior to Covid-19.

The most recent economic data from the CSO shows that the Industry (excluding Construction) sector increased by 0.8% year-on-year over the same period. Gross Value Added for the Multi National Enterprise-dominated sectors expanded by 1.7% in Q2 2023 compared with Q2 2022.

Recent CSO data on Industrial Production and Turnover production in manufacturing industries rose by 1.3% in September compared to August 2023. However, production was 22.8% lower in the three months from July to September 2023 when compared with the same period in 2022. From July 2023 to September 2023, turnover in manufacturing industries grew by 0.7% compared with the previous three-month period.

Over the two-year period prior to Budget 2024 a total of €12 billion – 4½ per cent of national income – was provided in cost of living and doing business supports, comprising a mix of permanent and one-off measures, to absorb some of the impact and ease the burden of inflation on households and businesses. Budget 2024 contained a number of measures which will support businesses facing increased costs of doing business, including the Increased Cost of Business Grant will be targeted at Small and Medium sized businesses who operate from a rateable premises, with a total allocation of €250m and an extension of the 9% VAT reduction for gas and electricity until 31^stOctober 2024, among other measures.

As set out, my Department continues to monitor sectoral economic activity and risks to this activity. However, no new measures are currently under consideration beyond what has already been announced.The Government’s approach to enterprise policy continues to be guided by the priorities set out in the White Paper on Enterprise 2022-2030 – published in December last year. This review of Enterprise Policy was the first since 2018 and was motivated by an awareness of a changing enterprise landscape posing new challenges, including shifting patterns of globalisation driven by geopolitical change, disruptive technological innovation, and lagging productivity in parts of the indigenous sector of the economy.

The White Paper is being implemented through a series of consecutive two-year Implementation Plans, the first of which was published in May of this year, covering the period 2023-2024. As part of this implementation process, the White Paper commits to exploring options for strengthening horizon scanning and strategic foresight in the future, which will facilitate an agile policy approach that enables Government to adapt to new risks and opportunities as they emerge.

Bernard Durkan (Kildare North, Fine Gael)
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207. To ask the Minister for Enterprise, Trade and Employment the extent to which he believes support for small and medium-sized enterprises remains, given the challenges now and in the future; and if he will make a statement on the matter. [51751/23]

Bernard Durkan (Kildare North, Fine Gael)
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208. To ask the Minister for Enterprise, Trade and Employment the degree to which he remains satisfied that the level of support for small and medium-sized enterprises here is adequate; and if he will make a statement on the matter. [51752/23]

Neale Richmond (Dublin Rathdown, Fine Gael)
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I propose to take Questions Nos. 207 and 208 together.

My Department’s White Paper on Enterprise to 2030 sets out an ambitious vision for Ireland’s enterprise policy, to protect Ireland’s strong economic position, and respond to challenges and opportunities that have emerged because of the pandemic, wider economic and geo-political developments, digitalisation, and an increased urgency to decarbonise industry. It provides for a sustainable, innovative and high-productivity economy, with rewarding jobs and livelihoods in the period ahead.

My Department and its officials are fully committed in advancing the interests of SMEs in Ireland, ensuring the full support provided in Budget 2024 will further progress this sector.

The Local Enterprise Offices (LEOs), play an extremely important role as part of a supportive ecosystem, providing their services direct to small businesses and promoting entrepreneurship within towns and communities across the country. They act as a ‘first stop shop’ providing expert advice and guidance, financial assistance, and offer a ‘signposting’ service for all government supports available to business owners throughout the country.

The LEOs received €9 million additional funding in Budget 2024, which will provide additional capacity for grant approval, training and development programmes and allow the LEOs to extend financial supports to businesses with up to 50 employees, who have ambition to begin exporting.

The ‘All in a Day’s Work’ campaign, focuses on how the Lean, Green and Digital products available can help businesses to save time, money, and energy. In addition, the LEO Mentor Programme seeks to provide LEO Clients with the knowledge, skills, insights and entrepreneurial capability of experienced business practitioners.

2024 marks the Ten-Year anniversary of the LEOs and Officials in my department have commenced work on the development of a LEO policy statement that will determine the direction of course for the LEOs for the coming years and seek to implement the recommendations of the White paper on Enterprise to further enhance the services available through the LEOs.

In addition, the nine Regional Enterprise Plans Launched in 2022, are supported by regional Steering Committees and focus on undertaking collaborative projects that can help strengthen the regional enterprise ecosystem thereby supporting enterprise growth and job creation locally.

Furthermore, the Retail Forum, of which I am a member, meets quarterly and one of the current priorities is supporting the sector to deal with the increasing cost of doing business. My Department is arranging stakeholder workshops to ensure that the views of enterprise are reflected in this assessment and Retail Forum members have been invited to attend.

My Department has secured €250m for the Increased Cost of Business Scheme. The grant will be paid to SMEs who pay commercial rates to their local authorities, and will provide targeted refunds to around 130,000 micro and small businesses, accounting for 87% of rated businesses.

Other measures such as the new targeted Angel Investment Scheme will introduce a reduced Capital Gains Tax Rate to 16%, promoting innovation for angel investors investing in ‘innovative’ SMEs. The increase in the Research and Development tax credit to 30% and the increase in the payment threshold to €50,000, aiming to encourage investment in R&D by both large and small companies.

The new National Enterprise Hub which will include a dedicated website and phone line to Hub Advisors, developed by Enterprise Ireland, this will help businesses to navigate the comprehensive suite of supports that are being offered to business throughout Ireland.

As Minister of State for Business, Employment and Retail I look forward to progressing further the interests of SMEs. I want to ensure you that I, my Department, and its officials are fully committed to serving the SME sector in Ireland.