Tuesday 21 January 2020

13,000 jobs could be created with EIB investment, says Government

Donal O'Donovan and Colm Kelpie

The PMI for April, down from 48.6 in March

The PMI for April, down from 48.6 in March

BIG-MONEY projects supported by the European Investment Bank (EIB) could provide an additional 13,000 Irish jobs, according to estimates from the Department of Public Expenditure and Reform.

The news comes as the manufacturing sector suffered the sharpest decline in more than a year-and-a-half in April, fuelling fears that the economy is now dramatically slowing.

Slowing growth has fuelled calls for a stimulus package to revive the economy.

The Government has courted the EIB aggressively over the past two years as a source of 'off-balance-sheet' financing for such projects.

Top officials from the EIB were in Dublin this week for an internal management meeting and to hold talks with five cabinet ministers including Public Expenditure Minister Brendan Howlin and Finance Minister Michael Noonan.

This week, the EIB provided a €200m loan fund to AIB to make available to small and medium-sized businesses at discounted borrowing rates. It also signed off on co-financing to build the N7 Newlands Cross fly-over and upgrade the N11 Arklow-Rathnew road in Co Wicklow to a dual carriageway.

Up to 1,000 construction jobs will be created during the road-improvement scheme.

The EIB is also providing €200m for the Government's Water Services Programme, which will support some 1,600 jobs, according to Mr Howlin's department.

The EIB is in discussions about public-private partnership (PPP) investment on the N17 road, as well as at the University of Limerick. It could potentially help finance the Dublin Institute of Technology's (DIT) new Grangegorman campus as well as ongoing school-building projects across the country.

In total, the Department of Public Expenditure estimates that the EIB could provide €600m as its share of PPP projects this year.

The schemes could ultimately help provide up to 13,000 jobs, the department said. The bulk of the jobs would be in infrastructure.

The figures have been released as new data shows that unemployment is static at 14pc and as the manufacturing sector suffered the sharpest decline in more than a year-and-a-half in April.

This week, Mr Noonan cut his growth projections for this year, blaming a fall in demand for exports and weak economic conditions across Europe.

Manufacturing sector data from NCB Stockbrokers suggests that both output and new orders fell for the second month in a row amid signs of deteriorating economic conditions, while the rate of job cuts was the fastest in 19 months.

The Purchasing Managers Index (PMI) fell to 48 last month, down from the reading of 48.6 in March, marking the sharpest deterioration since September 2011.

The index measures the overall health of the Irish manufacturing industry on a single-figure scale and is closely watched. Anything over 50 signals growth, while less than 50 indicates contraction. The index also fell in March.

The fall is further evidence of the impact Europe's slowdown is having on Ireland's recovery as the country looks to exit the bailout programme at the end of the year.

Irish Independent

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