Ireland was the only country in Europe where manufactured exports grew in 2020, despite the Covid crisis.
This is due to our competitiveness and sectoral mix, with Ireland’s extensive tech and medtech sectors playing a significant role in global supply chains throughout.
With around 260,000 employed in the sector, Ireland’s level of employment in high-technology manufacturing as a share of total employment is the highest in the EU at 2.5 times the EU average. And although we have just 1pc of the EU’s population, we account for 5pc of its manufactured goods exported globally.
Irish-owned manufacturing exporters grew their sales globally by over 80pc between 2010 and 2019, while value-added per person employed grew by one-quarter. FDI manufacturers over the same period grew their exports by 44pc.
By comparison to our largest neighbour, the UK is 13 times our size in terms of population but is only 2.7 times larger in times of manufactured goods exports.
Our biggest exporting sectors are pharma and chemicals at 51pc, food and drink and tech are both at 13pc, and medtech is 10pc.
Our biggest markets are the EU at 37pc, US at 31pc, UK at 10pc, and then China (5.4pc), Switzerland (3.6pc) and Japan (1.8pc).
These are impressive statistics and underline the central importance of a sector that has thrived in recent years, with significant investment in advanced manufacturing techniques and increasing focus on new technology processes.
But as vaccinations progress and the world emerges from the pandemic over the course of 2021, Ireland needs to do more to consolidate its position as a manufacturing centre of excellence and give much stronger signals that the country is open for business.
The manufacturing sector’s performance throughout 2020 and to date in 2021 in keeping global supply chains running smoothly has been impressive.
But while Ireland did comparatively well its management of the Covid-19 crisis in the early stages, the country has been slow to reopen the economy, or at least to illustrate the clear pathway back from Level 5 restrictions.
Internationally, the pressure to attract investment is always on, with competitor countries constantly seeking to depose and replace the high-achieving countries such as Ireland.
Currently, there is a view that the EU overall is slow to emerge from the crisis, and among its EU counterparts, it’s fair to say that Ireland has had one of the strictest and most prolonged lockdowns.
Any perceived slowness about reopening during the second half of this year is a potential threat to future investment, either from existing FDI players in the Irish market, from potential new players, or from indigenous companies which represent approximately 52pc of manufacturing in Ireland.
We all understand the need to protect human health and appreciate the difficult choices the Government has faced during each phase of the crisis. With light at the end of the tunnel provided by the vaccines, what’s needed now is a clear pathway back to a fully functioning economy.
As with all investment decisions, business likes certainty, and currently, in terms of issues such as the return to construction activity, retail and hospitality, and importantly, the increasingly prohibitive position Ireland has adopted in relation to international travel, up to and including 14-day quarantine for all incoming passengers which is extremely onerous for business travellers, Ireland is not providing the kind of certainty that business needs.
For a country that has played a significant role in keeping global supply chains moving throughout the crisis, this is an uncomfortable position to be in, and our manufacturing membership will be keen to see a detailed roadmap for reopening that will reassure FDI and local investors that we are intent on a timely and orderly reopening of our economy.
For a country that is also a leading location for FDI, and a member of the EU, it is not tenable to continue to impose such onerous quarantine conditions and it will be necessary to demonstrate our plan for quickly unwinding these conditions at the earliest possible time.
Site leaders and key staff members from EMEA headquarters located in Ireland need to be able to undertake essential business travel, as they are currently able to do when travelling to and from other locations. Ireland can only be impeded by being an outlier in this regard.
And the already pressing need to articulate the roadmap for full reopening of the economy will become ever more urgent as the year advances.
The expected pent-up demand for goods and services unleashed globally as more of the businesses and citizens in the leading global economies emerge from the crisis will put significant additional pressure on supply chains at every level.
It will be important that Ireland positions itself to take advantage of this expected uptick in economic activity, rather than being in the opposite position of being seen as a laggard.
In all of this, we know that the vaccination programme is the antidote to the pandemic and can hope that as supply and distribution increases, our
businesses and personal lives can return to normal. This needs to happen at pace in Ireland as elsewhere, but in the meantime, the manufacturing sector needs more confident reassurance from Government of a willingness to reopen at speed once sufficient numbers are vaccinated.
Sharon Higgins is director of membership and sectors at Ibec