Manufacturing in Ireland – Eurostat Annual Labour Force Statistics Over the last decade
Manufacturing firms play a critical role in the Irish economy – as a driver of exports, as an employer, as a source of revenue and as a key driver of growth. Manufacturing sales accounted for approximately 22 per cent of GDP in 20091 . There are 12,790 manufacturing enterprises in Ireland.2 Most of these are small in scale, with 83 per cent employing less than 10 people (micro firms) and 95 per cent employing less than 50 people. Manufacturing exports were approximately €92.9 billion in 2011, almost twice the level of manufacturing imports of €48.2 billion, giving a net export figure of €44.7 billion, thereby the primary positive contributor to the Balance of International Payments. The manufacturing sector also has significant spin off effects, such as indirect employment supported in other sectors including services, logistics, mining/quarrying, agriculture and subsupply.
Manufacturing firms source approximately €14 billion of materials and services from Irish based suppliers – although this has decreased from €17.5 billion since 2001.3 Manufacturing is a key driver of R&D activity and innovation, with 40 per cent of Business Expenditure on Research and mechanical engineering. Enrolments at Level 8 and 9 mainly relate to biological/biochem/chemical sciences; computing and electronics and engineering categories. There have also been strong increases in enrolments in energy/environmental related programmes, reflecting the increasing influence of the environmental agenda. There is a challenge for manufacturing enterprises in attracting the top graduate talent in that many of these graduates are sought after for other sectors such as health, education, software and research.
Eurostat Annual Labour Force Statistics Over the last decade, there have been two major shocks to the manufacturing sector in Ireland. The first occurred in 2000-2001 when, just as employment in manufacturing peaked at 296,600, the dot com bubble burst resulting in significant losses in manufacturing output worldwide, particularly within the ICT sector. The second major shock occurred in 2007-2008 when approximately 50,000 jobs were lost in manufacturing in the next 3 years. This was driven by the impacts of the global financial crisis on the one hand, which resulted in worldwide consolidation of manufacturing, major relocation of some Irish-based multinational operations abroad, merger activities and a sudden drop in demand for exports. On the other hand, demand for Irish-based manufactured goods linked to construction and consumption declined significantly in line with the downturn in those sectors. Since then Ireland has regained some competitiveness primarily as a result of falls in relative prices and favourable exchange rate movements.
On a sectoral basis employment in Pharma-chemicals, Medical Devices and Food and Beverages has remained resilient throughout the recent recession. The Engineering and ICT hardware sectors have stabilised after significant shocks in 2007/2008. Consumer Goods and Other Manufacturing have continued a long term decline. Firms in these sectors that remain competitive tend to be those that have invested in technology, marketing and their strategies are focused on export potential. Since 2007, the proportion of those employed in managerial, professional and associate professional roles has increased from 25 per cent to 32 per cent. This reflects cyclical shocks (which tend to affect those with lower skills disproportionately) and also structural change as the shift towards more knowledge intensive and higher value added activities increases skills demands across virtually all roles. The qualifications profile of the manufacturing sector is slightly below the national average with 38 per cent of employees having third level education and above (compared to 44 per cent nationally) and 16 per cent of employees with junior certificate or below (compared to 15 per cent nationally). There are substantial differences across manufacturing sectors. For example, within the food and drink, consumer products other manufacturing sectors, there are very significant proportions (20 per cent plus) of those with lower secondary education and below. At the same time, these sectors have comparatively low proportions of employees with higher level education compared to the national average. By contrast, the Pharma-chemicals and ICT hardware sectors have a very high qualifications profile, with over 60 per cent of those employed in those sectors having third level education and above.
There are substantial differences across manufacturing sectors. For example, within the food and drink, consumer products other manufacturing sectors, there are very significant proportions (20 per cent plus) of those with lower secondary education and below. At the same time, these sectors have comparatively low proportions of employees with higher level education compared to the national average. By contrast, the Pharma-chemicals and ICT hardware sectors have a very high qualifications profile, with over 60 per cent of those employed in those sectors having third level education and above. There are also significant differences across sectors in terms of variables such as gender, age and nationality. § For example, females account for 30 per cent of employment in manufacturing overall. However, within Pharma-chemicals and medical devices females account for around 40 per cent of employment, whereas in ICT hardware they account for just 25 per cent of employees. § 43 per cent of employees in Consumer Products and 38 per cent of those in Other Manufacturing are over 45 years of age, whereas just 26 per cent of those employed in ICT hardware are in the same age bracket. § 30 per cent of those employed in Food and Beverages are non-national, whereas just 7 per cent of those employed in Pharma-chemicals are non-nationals. The national average is 13 per cent.
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4 Revenue Commissioners (2011) Statistical Report 2010
5 CSO Quarterly National Household Survey Data