Number of jobs created by foreign firms slumps 42pc
Published 24/02/2010 | 05:00
IRELAND struggled to attract new jobs from foreign companies last year as the country became a by-word for economic instability overseas, a report said yesterday.
The number of new jobs created by foreign companies last year plunged 42pc to 7,500, according to the report which looked at foreign direct investment in 30 countries. Half of the jobs that were created came from US and a fifth from Britain. The average decline worldwide was just 25pc.
"Clearly the reputational issue caused us problems last year," said National Irish Bank economist Ronnie O'Toole. "The particularly sharp fall in investment in Ireland is largely due to the negative perceptions Ireland has suffered following the rapid increase in unemployment and the sharp deterioration in the Government's finances over the last 18 months. Other factors, such as the strength of the euro, also didn't help."
Ireland attracted just 0.7pc of all foreign direct investment last year, according to the report. That's a fraction of the investment which came to Ireland earlier this decade when the country was seen as one of the world's most vibrant economies. IDA boss Barry O'Leary said last year, while campaigning for the Lisbon Treaty, that almost 1,000 overseas companies created over 150,000 jobs in Ireland. In 2008 these companies accounted for over 60pc of our total exports and spent €16bn here, €6.7bn on payroll, and contributed almost half the total corporation-tax take.
Foreign investment will remain weak this year and next year, making it more difficult for countries such as Ireland to attract new investment.
"As the size of the global investment pie is likely to remain small in the next two years, competition for projects will be intense. There is little prospect of an immediate jobs boost even with the world economy starting to improve," Mr O'Toole added. Almost half of the investment is now in the services industry rather than manufacturing.
"The big success story in the economy over the last decade has been the growth in services exports from €20bn in 2000 to around €70bn last year. There was no growth in the €80bn of goods exports from 2000 to 2009.
"This is indicative of the extent to which the export sector has successfully moved away from low value-added manufacturing activities to better quality services jobs."
China attracted 10.8pc of all foreign direct investment last year, beating the US which got 8.7pc. The other countries in the top five were India, the UK and Mexico.