Dáil Éireann Debate, Thursday - 23 May 2024
174. Deputy Bernard J. Durkan asked the Minister for Enterprise, Trade and Employment the extent to which the services and manufacturing services have improved and recovered, given the existence of the pandemic; and if he will make a statement on the matter. [23497/24]
View answerMy Department continues to monitor challenges to the manufacturing and services sectors of the economy. Despite the economic challenges posed by the pandemic, the services and manufacturing sectors have proved resilient, along with the Irish economy at large. With an unemployment rate of 4.4% in April, the Irish economy is operating at a level close to full employment. The risks to employment will depend on the risks to the economy, more broadly. Real GDP growth is projected to be 2.6% in 2024 and 3.9% in 2025, according to forecasts in the Stability Programme Update (SPU) 2024. The SPU also notes that the economy has likely passed it’s cyclical peak, with the growth rate expected to moderate over the medium term. As a small open economy, we must be vigilant of the risks that external factors pose, such as geopolitical events or a general worsening in global economic conditions.
Manufacturing is a critically important sector of the Irish economy, with clusters of world class manufacturing operations in areas such as biopharmaceuticals, engineering, medical technology, building materials, and food production. He latest Labour Force Survey data shows that there are 320,400 people employed in the industry sector as of Q4 2023, a substantial increase over the 288,300 people employed in the sector in Q4 2019, just before the start of the pandemic.
In terms of Gross Value Added, the rate of annual growth in the industry sector stands at 9.4% for Q4 2023, a decline from the 31% year-on-year growth for Q3 2023 but equal to pre-pandemic levels of 9.4% in Q4 of 2019. In the manufacturing sector specifically, the most recent data available demonstrates the sector added over €192 million in gross value in 2022, an over 70% increase from 2019 when the sector added €112 million in gross value.
Recent CSO data on industrial production and turnover in manufacturing industries shows growth for 2023 relative to 2019 (the pre pandemic baseline) of 64% and 43%.
The services sector – the largest sector by employment in Ireland – employs over 2.1 million people as of Q4 2023. This is substantially higher than pre-pandemic levels, with 1.8 million people employed in Q4 2019. In the wholesale and retail trade and accommodation and food service sub-sectors, employment levels have increased from 311,500 and 180,800 people in Q4 2019 to 343,800 and 183,100 people respectively. Administrative and support service activities have seen a decline in employment levels over the same period, going from 112,100 people employed to 106,500. In terms of yearly gross value-added growth, the wholesale and retail sector grew 2.1% year-on-year in Q4 of 2023, down from 7% in Q4 of 2019. The accommodation and food beverage sector added 2.2% in year-on-year gross value-added growth, a substantial increase from Q4 2019 when gross value added declined 12.8% year-on-year. Administrative and support service activities experienced a yearly gross value-added decrease in Q4 of 2023 of 7.3%, in Q4 of 2019 the same sector added 5.3% in gross value added.
My Department continues to monitor developments and risks in sectoral economic activity, while pursuing pro-enterprise and pro-competitive policies. Published in December 2022, the White Paper on Enterprise 2022-2030 sets out Ireland`s industrial policy for the medium- to long-term, building on Ireland's strengths of an open economy with strong trade and foreign direct investment, a vibrant innovation hub, and a resilient labour market. This review of Enterprise Policy was motivated by an awareness of a changing enterprise landscape posing new challenges, including shifting patterns of globalisation driven by geopolitical change, disruptive technological innovation, and lagging productivity in parts of the indigenous sector of the economy.
