By Niamh Hennessy
Wednesday, November 09, 2011
ALMOST half of Ireland’smultinationals plan to hire staff in the next 12 months.
Well over two thirds (70%) said Irish labour costs are more expensive than comparable locations, while only 13% said Irish labour costs were below comparable locations, according to an Irish Management Institute/National Irish Bank survey.
This is a slight improvement on the 2009 survey but cost competitiveness remains a worry for multinationals.
Just over half of firms said that their growth plans were being hindered by the lack of suitable skills in Ireland. Britain was identified as the primary source of competition with many firms having difficulty competing with Britain following the devaluation of sterling.
After Britain, other important sources of competition for Irish subsidiaries include China, the US and India.
The survey also found that 13% of firms surveyed expect to cut employment numbers.
This is a significant improvement on last year’s survey, when approximately the same number of firms planned to cut their work force as planned to expand.
National Irish Bank chief economist, Dr Ronnie O’Toole said: "The post-crisis recovery is now two and a half years old, though even now the immediate prospects look weak.
"However, Irish exports fared relatively well during the recession, and given the type of industries we are concentrated in, such as pharmaceuticals and services, we can continue to grow even in the face of sluggish world demand."
A majority of subsidiaries surveyed said that the greatest competitive threat they faced was from subsidiaries within their own company, not from other companies.
The survey said it was important that Irish subsidiaries are competing for and winning new "mandates" from within their own company.
Chief executive of the Irish Management Institute Dr Tom McCarthy said: "Six out of every ten companies surveyed predicted that their turnover would increase in 2012 and many of these will be recruiting as a result.
"In fact, 52% of companies responded that their growth plans were being hindered by the lack of suitable skills, with engineering, information technology and management and business skills identified as the top three areas."
A fifth of companies responding to the survey characterised their Irish operation as the strategic centre of the global company, while a further 42% of respondents described their Irish operations as being the strategic centre for a region or a particular product or service.
This appeared in the printed version of the Irish Examiner Wednesday, November 09, 2011