Wednesday, 30 April 2008
Dáil Eireann Debate
2. Deputy Willie Penrose asked the Minister for Enterprise, Trade and Employment his views on the continuing level of job losses in the manufacturing sector; the steps being taken to reverse this trend; and if he will make a statement on the matter. [16575/08]
Deputy Micheál Martin: The manufacturing sector in Ireland has evolved noticeably since 2000 in terms of the composition of industry and the nature of activities and is likely to continue to do so. Manufacturing continues to be a significant employer accounting directly for 11% of total employment and a significant amount of associated services employment. In order to sustain and grow the sector, the Irish-based manufacturing enterprises will have to continue the progression to high value-added sectors and activities and continue to increase productivity through investments in human capital, technology and innovation. Irish manufacturers who engage in specialised, sophisticated, high technology and value-added activities can continue to compete successfully on international markets. These sectors require specialised skilled staff, specialised technologies and flexible operations and other factors which are not readily available in many low cost economies, such as modern intellectual property protection laws, a business-friendly regulatory environment and so forth.
The latest available data on manufacturing employment are those compiled by the Central Statistics Office in its earnings and labour costs release, published in March 2008. This release indicates that at quarter three 2007 there were 227,300 persons employed in the manufacturing sector, which represents a small decrease of 700 on the numbers employed in the corresponding period in 2006. It is important to keep this in perspective both in terms of global economic conditions and the continued strength of the euro. Our manufacturing sector continues to perform strongly and 2007 represented a very good year, with production growing by 7.5%, the highest annual change since 2002.
Over the last number of years there has been a significant churn in employment as is typical of a developed, open and dynamic economy such as Ireland’s. Ireland is no longer a low cost economy and manufacturers in particular are facing increased competition from producers in lower cost areas. Nevertheless, Ireland continues to attract high-value manufacturing activity as evidenced by recent announcements by companies such as Zimmer, Green Isle Foods, Thermo King and others to establish or expand their facilities in Ireland. Other sectors, especially the services sector, are providing significant new employment opportunities. Since 1997, over 500,000 new jobs were created in Ireland and the number in employment now exceeds 2.1 million.
As part of the commitments included under the partnership agreement Towards 2016, I established the high-level manufacturing group to review the challenges facing the manufacturing sector and to identify further measures to meet those challenges. The group’s report, which was published earlier this month, contains 27 recommendations directed at key areas of innovation and productivity leading to transformational change, reskilling and management development for the innovative firm, increasing awareness and the take-up of existing supports. In addition, the group recommends the establishment of a manufacturing forum to take responsibility to progress the implementation of the recommendations outlined in the report and to act as a strong advocate and champion for the manufacturing sector to ensure that manufacturing remains central to current and future industrial policy. Follow-up to the report will be discussed with the social partners as part of the review of Towards 2016.
The programme for Government contains a range of commitments focused on maintaining and enhancing our framework competitive conditions and promoting new areas of competitive advantage, including developing our research and development base, investing in critical physical and communications infrastructures and promoting tertiary education and lifelong learning. Over the period of the national development plan, the Government will provide total investment of over €25 billion which will be of direct benefit to the enterprise sector, including manufacturing. A total of €8.2 billion is earmarked for the strategy for science, technology and innovation to assist in achieving our goal of becoming a leader in research, development and innovation. An investment of €3.3 billion will specifically support the development of the indigenous and foreign direct investment enterprise base, while €13.7 billion will be devoted to skills development.
In any event, I thank the Minister for his detailed reply. It is time that we shocked ourselves out of our absolute complacency. We have been on auto pilot. We have been so used to the good times that we have virtually no idea how to deal with the difficult times. I do not intend to talk down the economy because the fundamentals are sound. However, there are problems that may well create difficulties for us.
Recently the Central Statistics Office published live register figures indicating that we currently have 5% unemployment. However, the situation in individual towns is much worse. Survey data on 28 towns with a population of more than 10,000 shows that 18 of them had more than 10% of their populations on the live register. For example, 21.52% of the population of Newbridge is on the live register. Is that not a cause for concern? Does the Minister agree something must be done to tackle that issue? Will he confirm that the live register figures on Friday will indicate more than 200,000 unemployed?
Does he agree that action is required if the rapid climb in the numbers on the live register is to be halted and reversed? The first action required is a change of attitude on the part of the Government to recognise the seriousness of the position. Every time job losses are announced, the Government appears to be caught unawares. Are we chasing the horse after it has got out of the shed with no one to bolt door? Where stands the early warning unit in the Department, which is responsible for identifying plants at risk and intervening to ensure retention of the maximum number of jobs? If it is not in operation, will he take steps to reactive the unit?
The Minister referred to the upskilling of 500,000 people over the next number of years. Will he bring forward an accelerated programme of training opportunities to ensure people who lose their jobs can take up alternative employment? Apart from the construction slowdown, is it not the creeping closure of long-term local employers engaged in the manufacturing sector that is the nub of this issue? It is important, therefore, people in this sector are afforded the opportunity to retrain without much ado or fuss.
Deputy Micheál Martin: Sometimes people use general and simplistic catchphrases such as “manufacturing in decline”. Due to the high capitalisation and more specialised nature of manufacturing, it is a changing story but, between 2000 and 2006, manufacturing output increased by 35%. We are performing well in this sector but the same numbers will not be employed as ten years ago due to the nature of the change. Manufacturing employment has reduced from 16% to 11% over the past ten years but the key issue is how the sector is performing in terms of output, longevity and so on.
I accept in the broader employment context, the number on the live register has increased but we were anything but on autopilot. Inner anxiety has defined us over the past number of years because our economic success is recent and unprecedented. We are, therefore, not sitting on our laurels complacently. We are endeavouring to put in place the policy platforms that will enable us to compete for and retain jobs into the future. That means implementing the science, technology and innovation strategy, which my Department co-ordinated with eight other Departments and which was generously funded by the Department of Finance in the Estimates to the tune of €8 billion over the next six years, because we want investment in science and research to underpin jobs and to show the world Ireland will discover new products and services and ways to doing things. That is our future. We cannot compete for low cost, low skilled jobs in the manufacturing sector.
We are active in the services sector, which has contributed significantly to jobs growth over the past decade. We are close to finalising a strategic approach to maximising the number of jobs and the value we can achieve through services over the next number of years. The Deputy correctly mentioned the skills issue. FÁS has a very good approach to intervening in circumstances where redundancies occur and matching people with new job opportunities, training and programmes that facilitate the reorientation of workers in new jobs and that will continue. The IDA and Enterprise Ireland monitor their client companies, particularly those that may be in difficulty. However, ultimately, a company’s corporate headquarters far removed from Ireland determines its decision-making, the timing of its decision and the degree to which it will inform us about its plans based on global issues
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