Can Ireland’s Economy re-invent itself in the short-term?

Lisa O’Carroll
guardian.co.uk, Thu 30 Jun 2011 12.55 BST
Blogpost
After all these months of bad news, time for some good news.
I’ll rush past the latest gloomy stats – unemployment figures still up, retail sales index still down – and get to Entreprise Ireland’s annual report, which is just out and shows an economy on the road to recovery.
The agency is responsible for nurturing companies that export and the report shows that sales overseas in the past year are at record levels – up 10% to €14bn (£12.7bn).
Entreprise Ireland’s chief executive, Frank Ryan, is ebullient about the figures. “All the focus has been on the property sector and we’ve forgotten about the economy that we have built,” he told me.
He says there has been a strong rebound in EI sectors that centre on the food business, life sciences, electronics, engineering, software and consumer retail. So strong is the rebound that the export economy has now recovered all the losses experienced in 2009, with increases in exports for 22 months in a row.
“Ireland can be the comeback economy of Europe,” declared Ryan. “When I say this, I mean it. It is evidence based. It is not based on a wish.” He said the export environment is much stronger than it was 24 months ago and, by the end of 2011, he expects Ireland “will be above pre-recession levels” of exports.
The report also shows a record €1.95bn in new export sales were secured in 2010.
No 1 for baby formula
Food is Ireland’s No 1 export and has seen growth of 11% in the past year, from €6.9bn to €7.7bn.
Five years ago, the agricultural sector was seen as the “sunset industry” of Ireland but now all the indicators show it is thriving, with real growth across the board. Exports of beef are already exceeding targets, with increasing affluence in places such as Asia driving increased demand.
A separate report out this week, the 2020 Food Harvest report, showed that Ireland produces enough food to feed 36 million people. By 2020, it wants to be in a position to provide enough food for 50 million people.
One of the biggest deals struck last year was by Dawn Farm Foods, which won a €700m contract to supply the Subway takeaway franchise across Europe.
Baby food is another top food export. Ireland is the No 1 exporter of baby formula in the world – did you know Aptamil comes from Ireland? One in seven children in the world drink products manufactured in Ireland by Danone, Pfizer and Abbott. And by the time Danone finishes off a €50m investment in county Cork, that figure should be one in five.
Ryan says the challenge for Ireland now is to get access to new markets and like everybody Entreprise Ireland is actively pursuing the Bric countries – Brazil, Russia, India and China. “Exports to Brazil have grown 22%. We’re only starting there, we only have an office there for the last four years,” says Ryan.
Entreprise Ireland has a key role in Ireland’s recovery. As domestic demand remains depressed, the only growth that will drag the country out of recession will be in overseas sales.
Another key indicator of a recovery is employment. Unhappily, figures out at the end of June showed unemployment up again, with four in 10 of those on the live register now long-term unemployed.
But in export companies, the picture is different. Ryan said employment levels in IE’s client companies had started to grow again in the past three months. “That has not happened since the start of the recession. We are coming out of the trough.”
Ireland’s has second highest foreign investment after UK
@Gadzho Thanks for your post pointing out all the positives about Ireland this week.
So yes, Eurostat had a positive story out about Ireland this week, as well as the negative about the price of alcohol and hotels.
The European statistics office showed that Ireland was the second largest net recipient of foreign direct investment from outside the EU in 2010.
Ireland got €21bn net from outside the EU, second only to the UK, which received 28bn net from non-EU investors. The US is Ireland’s biggest net investor.