IDA reports bumper H1 with 9k new jobs, but warns of Brexit wounds

Ireland retained its crown as one of the strongest performers for foreign direct investment (FDI) in Europe and, in the first half of this year, IDA Ireland recorded that 9,100 new jobs were announced in the sector. But the IDA has also warned that Brexit may have a dampening effect on FDI globally.

The performance is on par with the first half (H1) of 2015, which was also one of Ireland’s best years for FDI.

So far in 2016, Ireland has won 115 projects, up from 110 this time last year.

The strongest-performing sectors were technology and business, international financial services and life sciences.

While the US remains Ireland’s key source market, new growth markets, including Asia-Pacific, are growing fast.

The changing structure of the global pharmaceutical industry is also yielding opportunities for Ireland, resulting in capital-intensive bio-pharma campus investments.

Older pharma plants are, however, facing an existential crisis.

Cautious optimism

IDA CEO Martin Shanahan said: “The flow of investments won by Ireland in the first half of the year have been very strong considering the global economic and geo-political backdrop, and we are cautiously optimistic that the second half of the year will see a continuation of this trend.

“Ireland continues to outperform and grow market share, however, with the full impact of Brexit still unknown and economic conditions changing in some key markets, the final 2016 outcome is subject to some risk at this stage and a lack of visibility.”

Shanahan also added that he “expected competition for investment to remain intense and that Ireland needed to continue to focus on competitiveness, maintain pro-enterprise policies and to invest in infrastructure and enterprise supports”.

Shanahan said that a strong feature of the first six months was the amount of investments won for locations outside Dublin. Investments into regional location in the first half of 2016 included:

Brexit stage left

IDA Ireland, which works with more than 1,200 overseas companies, said the recent Brexit decision by the UK to leave the EU may present potential opportunities for Ireland in the form of new investments.

However, it warned that the impact of Brexit on the global and European economy is as yet unknown and could have a dampening effect on FDI globally.

“Ireland’s stability, the certainty on EU membership and therefore access to the European market, coupled with the strong value proposition that Ireland already offers, would be important in the period ahead,” Shanahan said.

“This value proposition also includes access to talent (both Irish and European), a competitive, transparent and consistent taxation regime and the ease of doing business,” he said.

Shanahan added: “Similarities between Ireland and the UK and attributes such as being English-speaking, a common law system and geographic proximity means that Ireland will be the first choice for many companies that require a base within the European Union.” IDA plans to work directly with companies in the period ahead on their international activities.”

IDA said it has written to all its clients to reassure them of Ireland’s position as a member of the European Union and to offer the IDA’s support in dealing with issues that may arise from changes at a European level.

The Minister for Jobs, Enterprise and Innovation, Mary Mitchell O’Connor, agreed that the decision by the people of the UK to leave the European Union may create challenges for the global FDI environment.

“But Ireland’s strengths – including our talented workforce, ease of doing business and our strong track record for FDI – very much remain in place and I am confident that the IDA is also equipped to harness any new opportunities that may arise.”