FDI Employment Hits New Benchmark Of 187,056 People

IDA IRELAND, the Government agency responsible for attracting foreign direct investment, has announced the highest level of employment in its client companies in its 67 year history. Total employment at overseas companies now stands at 187,056 people, the highest level on record.

IDA client companies created just under 19,000 (18,983) jobs on the ground during the year across a range of sectors, with every region of Ireland posting net gains in jobs. Net jobs were 11,833 compared to 7,131 in the same time period last year – representing a year-on-year rise of 66%.

The latest result means that more than one-in-five private sector jobs in the economy (direct and indirect employment), are as a result of IDA-supported FDI representing a vital economic contribution by the multinational sector. The performance was produced against a background of global economic uncertainty, intense competition from other jurisdictions and a changing global taxation landscape.

The number of investments secured during the year rose from to 213 from 197 in the previous year. The number of new name investments went to 94 from 88 in the previous year. The strong net job creation performance is a result of a very strong pipeline of new investments and lower job losses within the employment portfolio. Losses as a percentage of the overall employment portfolio were at their lowest level ever. Working with companies to transform their activities to higher value in Ireland is a key part of IDA’s strategy.

The ability to source skilled talent was the chief driver of the performance, said the organisation today – combined with Ireland’s long track record of attracting global companies. Ireland’s stable taxation regime has also contributed to investor confidence.  IDA Ireland is in the first year of its five year strategy, Winning: Foreign Direct Investment 2015-2019, and the latest results are the first indication of how the strategy is performing.

Minister for Jobs, Enterprise and Innovation Richard Bruton TD said: “The central aim of the Action Plan for Jobs is building a sustainable, job-creating economy based on enterprise and exports to replace the failed model based on property and debt which collapsed. Over the past four years we have seen major progress in this, with over 60,000 jobs created by exporting companies, well over a third of the total job-creation in that period. It has been truly an export-led recovery, and multinational companies have played a massive role in this.”

“Today’s excellent results show that our multinational companies continue to perform exceptionally strongly, surpassing previous record levels of job-creation and achieving the highest employment levels on record. Consistent with the targets we set in our strategies, employment outside Dublin is performing strongly, with jobs growing in every region of the country. I wish to pay tribute to Martin and all the team at IDA on this achievement.”

“This consistent record of job-creation does not happen by accident, and is only made possible by careful implementation of good pro-jobs policies. We have a long-term economic plan to keep the recovery going, and this can give us confidence that with the right choices we can continue seeing results like this in the coming years.”

Commenting Chief Executive Officer of IDA Ireland, Martin Shanahan said: “The contribution of the FDI sector has always been important to Ireland, but the 2015 results show that the contribution has never been larger. It is particularly welcome to see such a broad-based performance with all industry sectors and all regions growing.”

“Many of the projects won in 2015 were capital intensive, and provided strong additional benefits beyond the jobs themselves. IDA’s performance is the result of hard work by IDA’s global team, including the 35 new staff that joined the organisation under the Winning Abroad initiative in the last year.”

Among the leading investments secured during the year were:

• Facebook planning to construct a new data centre in Clonee, Co Meath.
• Apple making a €850 million investment in Athenry, Galway with 300 jobs in multiple phases
• Pramerica is expanding its operation in Donegal creating 330 new jobs over three years. The company is building a new, state-of-the-art, eco-friendly office campus near its current location in Letterkenny, County Donegal to accommodate the expansion
• Agora Publishing is setting up a multilingual contact centre in Portlaw in Waterford, adding 100 jobs
• Medical devices company Zimmer investing €51m in Oranmore, Galway creating 250 jobs
• US engineering Company ABEC Inc planning to expand its global operations in Fermoy, creating 100 jobs.
• Slack announced plans to open a European HQ in Dublin to meet the growing demand. The company plans to hire 100 people in the next two years in customer support and account management roles
• Northern Trust announced it was expanding its operations in Limerick by creating up to 300 jobs over the next three years.
• Regeneron announced it was investing an additional $350m in its Limerick Industrial Operations and Product Supply (IOPS) bioprocessing campus and adding another 200 jobs.
• Indeed announced expansion plans for its Dublin-based headquarters for Europe, the Middle East and Africa (EMEA), with 300 new employees in the next two years.
• Alexion Pharmaceuticals announced €450 million expansion in Dublin – 200 New Jobs and 800 construction jobs to be created over four years.

Regions:

IDA has set itself ambitious targets via its five year strategy, Winning: Foreign Direct Investment 2015-2019, in relation to regional dispersal of FDI investments.

The investments to be delivered under the strategy will be a combination of new name investments, expansions from existing companies in Ireland and R&D investments. This strategy was launched in the first quarter of 2015 and the 2015 employment survey shows all regions making gains.

In 2015, 53% of all jobs created by IDA clients were based outside of Dublin, compared to 49% in 2014.

During the year under review, several Regional Jobs Plans were published by the Department of Jobs, Enterprise and Innovation. IDA played an active part in developing these strategies and they will further enhance IDA’s ability to win investments in regional loactions.

While there is a global trend towards FDI favouring large urban centres, IDA statistics continue to show the strength and resilience of FDI in regional locations. For example, IDA clients based outside of Dublin account for 59% (109,812 people) of total IDA client employment.

Economic Impact

IDA estimates that for every 10 jobs generated by Foreign Direct Investment (FDI), another 7 are generated in the wider economy (translating into 318,000 jobs or one in five private sectors jobs), with secondary economic benefits impacting positively on the construction industry, the retail sector and the hospitality industry.

In the construction sector, IDA client companies are a major contributor to activity levels nationally, with Regeneron building a large plant at Raheen in Co Limerick, Microsoft expanding in Leopardstown, Co Dublin, Apple constructing a data centre in Athenry, Co Galway and Alexion building a new facility in Blanchardstown, west Dublin.

Overseas companies continue to be significant exporters from Ireland, with IDA clients exporting, based on preliminary estimates, approximately €129bn in 2014.

In addition, IDA client companies spend, based on preliminary estimates, approximately €9bn on payroll annually.

IDA is working closely with its sister agency Enterprise Ireland on ensuring that links between overseas companies and indigenous firms are further enhanced, in order to deliver an overall macroeconomic benefit for Ireland.

Corporation Tax

IDA-client companies are major contributors to Ireland’s corporation tax receipts, representing approximately 65% of all receipts in 2014.

According to the Department of Finance, the performance of Corporation Tax (CT) receipts was significantly stronger than expected in 2015 at €6.87bn – the biggest corporate tax year ever.

The increase is attributable to a variety of reasons, including, improved overall business performance which in turn is a function of improved trading conditions.

IDA Ireland CEO Martin Shanahan said: “The rise in corporation tax receipts is consistent with the increased level of investment activity that IDA is observing on the ground. There has been a very strong pipeline of new investments over the past 18 months and we can see from today’s figures that multinationals are adding headcount at a high rate – which suggests a strong uplift in activity.”

Ireland has made a number of changes to its corporation tax regime over the past two years to ensure that it was aligned with best international practice.

“The stability of the Irish tax regime including the rate has contributed to investor confidence,” said Shanahan.

The introduction of the first OECD BEPS-compliant Knowledge Development Box at a rate of 6.25%, added to the attractive R&D tax credit and the rules in relation to the amortisation of IP, will position Ireland well to win higher value activity.

“However, Ireland needs to keep its tax offering under review, including personal taxation rates, to ensure that we remain competitive in the international environment.”

Outlook

Commenting on the outlook for 2016, Mr Shanahan said:

“Foreign investment in Ireland has clearly had a very strong outturn in 2015 and focus will understandably be on, can this strong performance be sustained further. We believe once Ireland concentrates on maintaining its competitiveness and retaining a pro-enterprise policy environment, as well as continuing to invest in education and skills, infrastructure and enterprise supports, building on today’s strong numbers is possible.

More specifically, the outlook for 2016 looks promising for the sector, with the IDA team already working on a strong pipeline for the first quarter. International challenges will continue to be a risk and these will need close monitoring, but I believe the sector is well positioned for a further strong performance in the 12 months ahead.”