Energy costs highlighted as a top issue for the manufacturing industry

The manufacturing environment in Ireland has “deteriorated significantly” since last year, with issues such as inflation, energy costs and labor force holding back the sector.

But the results of a survey by the Ibec group of companies published this morning show that despite the challenges, 53 percent of manufacturers are still positive about the external environment and 65 percent are confident about the prospects for their own business.

“Having successfully weathered the pandemic, our manufacturing companies are now confronted with the energy cost crisis, the highest inflation in many years and ongoing supply chain issues, all playing out against the backdrop of the war in Ukraine,” said Sharon Higgins, Executive Director of Membership and Sectors at Ibec.

“They also have to deal with the more constant challenges; Climate change, changes in the global tax system and Brexit.”

Energy costs were identified in the survey as the biggest challenge for manufacturers. Still, 47 percent of manufacturing industry executives intend to increase capital investment over the next six months.

Ireland’s manufacturing sector employs 260,000 people or 12 per cent of the workforce. It pays EUR 12.5 billion in wage and employment taxes and EUR 4.4 billion in corporate income tax each year.

“We know that international competition for investment never stands still and competing countries are constantly chasing us,” said Ms. Higgins. “Ireland must preempt this by never standing still.

“In addition to maintaining our business-friendly environment, we must also take care of the social infrastructure, which is of central importance for an attractive place to live and work.”

A separate report from PwC this morning shows that Ireland has risen in the rankings among EMEA countries as a location for successful private companies. PwC’s latest EMEA Private Business Attraction Index ranks Ireland seventh, up from 14th last year.

Switzerland, the UK and Sweden rank first, second and third as the best places for private business and entrepreneurship.

Ireland’s high personal tax rate and indirect taxes, including VAT, still weigh on the country’s overall attractiveness, according to the PwC report.

The index also suggests that more needs to be spent on education. Ireland ranked 31st out of 33 EMEA countries for such government spending.

https://www.independent.ie/business/irish/energy-costs-singled-out-as-top-issue-for-manufacturing-sector-42159332.html Energy costs highlighted as a top issue for the manufacturing industry

Fry Electronics Team

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