FDI driving growth, employment in Ireland with US role dominant - CSO
Foreign multinationals in Ireland in 2017 employed 318,000 people on wages averaging €50,000 – a third more than their domestic peers - as the role of FDI in Irish fortunes continues to climb, the CSO has found in a report published Thursday.
The analysis, which took a medium-term view surveying the growth of FDI from 2012 to 2017, found that investment by US-headquartered companies played a dominant role, surging by 188pc over the five-year period and injecting total 2017 investment of €519.5bn.
Trailing far behind, Bermuda-based companies contributed €38bn, the UK €20.1bn, Germany €11.9bn, Spain €8.8bn, France €8.3bn, and Canada and the Netherlands both €4.8bn.
Somewhat complicating that picture, the Central Statistics Office found that companies based in Ireland itself represented the No. 2 source for FDI in 2017, at €92.5bn. That figure reflected corporate inversions of previously American and Bermudan multinationals switching their headquarters to Ireland.
For 2017, the CSO study found Ireland performing leaps and bounds above most European peers in attracting foreign direct investment in relation to gross domestic product. While most European countries’ inward FDI flow was smaller than their GDP, Ireland’s stood at 253pc of GDP that year, second only to Luxembourg.
While this investment has helped drive growth in Ireland’s work force, the report found that FDI was creating proportionately fewer positions than its less well-paid domestic peers.
From 2012 to 2017, jobs at multinationals in Ireland grew by 7pc to 318,000, representing 14.3pc of all employment and what the CSO report called “modest growth on a significant base”. Five years before, at the height of Ireland’s economic crisis and joblessness, that contribution had been 15.7pc of employment.
In 2017, the report found, US multinationals provided 121,000 jobs in Ireland, the UK 81,000, Germany 25,000, France 14,000, the Netherlands 13,000 and Switzerland 11,000. It noted that US-driven employment has risen 10.9pc over the period, while UK-derived jobs fell 2pc – the only major national source to record a decline.
In terms of wages, the report found interesting distinctions in average wage levels even among multinationals. Over the five-year period, US companies offered the highest wage levels in comparison with European and Asian sources, although the latter closely followed American pay patterns. In 2017 the average US multinational-sourced salary was €64,000, Asia €61,000 and Europe €41,000.
Overall, pay at any multinational was likely better than at a domestic company. While foreign multinationals combined paid an average of €50,000 and Irish-domiciled multinationals €57,000, domestic firms paid only €33,000.
Japanese employers in Ireland paid the best of all, averaging €65,000.