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Ireland Update Summer 2014
 

Ireland Update Summer 2014

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IDA Ireland Update Summer 2014 - Information on Foreign Direct Investment in Ireland and Why Ireland for Overseas Investors.

IDA Ireland Update Summer 2014 - Information on Foreign Direct Investment in Ireland and Why Ireland for Overseas Investors.

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    Ireland Update Summer 2014 Ireland Update Summer 2014 Presentation Transcript

    • 01 - Ireland Summer2014 Update
    • 02 - Talent Our predominantly young work force is capable, adaptable, mobile and committed to achievement. The median population age is 35, the lowest in the EU. Track Record Over 1,150 multinational companies have already chosen Ireland as their strategic European base. Taxation Ireland’s Corporation Tax Rate is 12.5%. Technology Significant State Investment in R&D helps ensure Ireland stays at the forefront of technological innovation. Education Ireland leads in the skills race with a higher percentage of 3rd Level Graduates than UK, US and OECD averages. An EIU Benchmarking Competitiveness Report ranks Dublin as the best city in the world for human capital. European Market Companies located in Ireland benefit from barrier-free access to over 500 million consumers in Europe, one of the largest markets in the world (c22% of global GDP). English Speaking English is the universal spoken language. The country is a highly developed multi-cultural community and a leading member of the Eurozone. Why Ireland: Companies are attracted to Ireland for a variety of reasons:
    • 03 - Ireland, named Best country in the world for business by Forbes - Record year for FDI employment (over 166,000 employed, highest ever) in 2013, strong investment flows continue this year - Economy set for growth of 1.7% in 2014 - Labour market added almost 70,000 jobs since end 2012 - Significant improvements in Ireland’s competitive position - Hugely positive reaction to Ireland’s on-going recovery - bond yields sub 3% ‘Ireland is home to some of the brightest minds in the tech sector’ Michael Serbinis, CEO Kobo 2013 ‘Dublin is becoming one of the majorcentres of the universe forentrepreneurship’ Phil Libin, CEO Evernote 2013
    • 04 - Bond markets positive on Ireland’s on-going recovery During the programme: - Ireland exited the Troika bailout having beaten all deficit targets - Deficit down from 10.6% in 2011 to a forecast 4.8% this year International investors have responded positively - Ireland issued €2.75bn across three auctions, with consecutive record low 10-yearyields (sub 3%) - Over 80% of 2014 funding now complete - 3 main ratings agencies now have Ireland as investment grade Moody’s, Fitch and S&P ( upgraded Ireland to A- with a positive outlook in June) Source: Department of Finance Irish Deficit (% of GDP) 0 -2 -4 -6 -8 -10 -12 2011 2012 2013 2014 2015 Target DoF actual/forecast Source: CSO National Accounts, 2013 forecast from Ireland’s Central Bank Irish Real GDP Growth 4% 3% 2% 1% 0% -1% 2012 2013 2014* 2015* Strong GDP growth in prospect for 2014/2015. - European commission is forecasting growth of 1.7% in Ireland this year, accelerating to 3% in 2015. - Growth broad based with both domestic and external demand contributing - Domestic demand picking up - Outlook for Europe has improved, with knock on benefits for Irish exporters
    • Source: Manufacturing and Services - Markit / Investec, Construction - Markit / UlsterBank All Irish PMI’s are signalling growth: - manufacturing (12 months of growth), - services (22 months of growth), - construction returned to growth in September 2013 for the first time in 6 years. Labour market showing on-going improvement - Employment increasing since end 2012, with an additional 70,000 at work. Over 60,000 of these in full time employment. - Unemployment falling for 2 years, down to 11.8% from a peak of c.15%. - Job growth is feeding through to the income tax +7.8% YOY for Jan to May 05 - Source: CSO Positive signals from short term indicators Manufacturing Service Construction 65 60 55 50 45 40 35 30 JAN-12 MAR-12 MAY-12 JUL-12 SEP-12 NOV-12 JAN-13 MAR-13 MAY-13 JUL-13 SEP-13 NOV-13 JAN-14 MAR-14 Irish PMI’s (value over 50 indicates expansion) Number Employed (000’s) Full time Part time (right hand axis) 460 455 450 445 440 435 430 425 420 415 1,460 1,450 1,440 1,430 1,420 1,410 1,400 1,390 1,380 1,370 1,360 1,350 Q1-11 Q3-11 Q1-12 Q3-12 Q1-13 Q3-13 Q1-14
    • 06 - FDI led exports sector plays an important role High value exporting sector supported the economy through restructuring Total exports expected to grow by 2.8% in 2014 led by continued growth in services exports. Returned to current account surplus in 2010 following 10 years of deficit. Source: CSO; European Commission Forecasts Composition of Exports 2012 30% 20% 14% 9% 6% 6% 5% 0% 10% 20% 30% 40% PHARMA & CHEMICALS COMPUTER SERVICES BUSINESS SERVICES FINANCIAL SERVICES MEDICAL DEVICES MACHINERY & TRANSPORT FOOD & BEVERAGE * Miscellaneous sector account for the final 10% of exports
    • 07 - Significant improvement in cost competitiveness Irelands competitiveness has improved dramatically since 2008. The improvement has been driven by strong productivity growth and weak prices. Relative business costs have come down across the board, with labour costs, services and property costs all falling. Reflected in international rankings: +9 places in the IMD World Competitiveness yearbook since 2011
    • 08 - Labour Costs Competitive Since 2009 Irish labour costs have remained stable compared to an increase of 8% in the EU (see chart) Irish hourly labour costs fell below the Euro Area in 2011 and have remained so to 2013. Irish labour costs are 11th in the EU, below countries like Luxembourg, Germany, Belgium, and the Netherlands. Source: Eurostat 2014 Labour Costs Falling Irish hourly labour costs fell below the Euro area in 2011 and has remained below in 2013. 0% 0% 2% 4% 7% 8% 8% 8% 9% 9% 9% 10% 11% 11% 11% 12% 12% 13% 16% 32% 36% 50 60 70 80 90 1000 10 20 30 40 CYPRUS IRELAND CROATIA SPAIN HUNGARY EA 18 EU 28 DENMARK FRANCE ITALY NETHERLANDS GERMANY LUXEMBOURG BELGIUM SLOVAKIA UK CZECH REP AUSTRIA POLAND BULGARIA SWEDEN CHANGE IN LABOUR COSTS 2009-2013 (%)
    • 09 - Cost of Living Source: Eurostat 2014 Irish and EU 27 inflation (annual rate of change %). Cost of Living Improving Versus the EU27 4.0 3.0 2.0 1.0 0.0 -1.0 -2.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* 2015* * Forecast EU Commission Spring Forecast EU27 Ireland Eurozone Relative cost of living continues to improve - Inflation lower than the EU average since 2008 - Of particular relevance to young employees are drops in residential rents and house prices - Further competitiveness gains out to 2015
    • 10 - One of the most productive economies in EU Labour costs do not tell the whole story, productivity is also key. Irish productivity is c. 40 points above the EU27 baseline. Only Luxembourg and Norway have higher productivity levels. Source: AMECO Database 2013 One of the Most Productive Economies in the World Irish productivity is almost c40 points above the EU27 baseline. 167.8 160.7 142.6 127.4 116.6 115.1 111.4 109 108.9 107.9 107 106.2 104.8 100 92.8 91.7 81.1 78.8 75.1 72 72 71.8 70.4 68.7 63.4 100 120 140 160 180 2000 20 40 60 80 LUXEMBOURG NORWAY IRELAND BELGIUM SWITZERLAND FRANCE DENMARK SPAIN NETHERLANDS EURO AREA 17 ITALY GERMANY UK EU 27 CYPRUS GREECE SLOVAKIA SLOVENIA PORTUGAL POLAND CZECH REP LITHUANIA HUNGARY ESTONIA LATVIA LABOUR PRODUCTIVITY PER PERSON EMPLOYED (COMPARED TO EU 27). INDEX EU 27 = 100
    • 11 - Commercial Property The commercial property market in Dublin is stabilizing at competitive levels. Office rents are half peaklevels : Prime Dublin office rents are backto €377 per m2 in Q1 2014, from €673 perm2 in Q1 2008 (CBRE). Construction tenderprices are stabilising c.30% below peaklevels, on a parwith prices in the late 1990’s. Source: CBRE, **Society of Chartered Surveyors Ireland Source: CBRE DUBLIN (€/M2) Prime office rents down 700 600 500 400 300 200 2008 2009 2010 2011 2012 2013 160 150 140 130 120 110 100 90 INDEX**(1998=100) Construction Tender Price Index 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
    • 12 - +353 1 603 4000 idaireland@ida.ie @IDAIRELAND www.linkedin.com/company/ida-ireland www.youtube.com/InvestIreland These client companies have a significant impact on the Irish economy: - 25,000 jobs created in the last 2 years - Strong and integrated FDI sector : - €120.8bn exports - €1.3bn expenditure on R&D - Growing supply base - €11bn of purchases from Irish suppliers - €2.8bn of corporation tax Impact of FDI 2013 was a record yearforFDI, with IDA client employment rising to its highest level everat 166,184* Source: *Employment Survey 2013, ABSEI 2012