Later this month complete export data for 2015 will be released and after a total vale of €215bn in 2014, the value in 2015 may have been up to €250bn with indigenous exports including tourism and transport accounting for less than €30bn. While the total export value of €158bn in 2007 is not directly comparable with more recent data because of a change in methodology, still the increase would be enough to have official spinners and their yarn merchants salivating on superlatives. However, not only should last Friday's election washout for the governing parties lead to a questioning of the relentless public propaganda using distorted data but there is also a reality that exports are not a significant jobs engine for the Irish economy.


During the recession the rising headline data was useful in promoting confidence overseas as it gave an impression to journalists and investors that Ireland had switched focus from property and was achieving rising real exports in particular in computer services.

We estimate that half the estimated €250bn value for 2015, or about €125bn is fake, comprising €60bn related to the Double Irish tax dodge used by companies such as Google, Microsoft, Oracle and Facebook. The rest relates to the booking of overseas manufacturing in Ireland known as "contract manufacturing," and the excess profits of foreign-owned manufacturers.

Of the 135,000 jobs added in the Q4 2011-Q4 2015 period, direct jobs in the international tradeable sectors grew about 18,000 and fell 15,000 from the level in December 2007 (see chart below).        

We have included Industry, ICT, 5,000 and 4,000 respectively for International Financial Services from 2007 and 2011, and an estimate of 3,000 for consultancy activities in the Professional, scientific and technical activities category.

The Department of Jobs, Enterprise and Innovation produces an annual employment survey that used to be produced by Forfás, a now abolished agency.

The data are based on a survey of enterprise agency client firms. It is not directly comparable with the CSO's Quarterly National Household Survey and the 2004 report showed total employment in indigenous and foreign-owned exporting firms at 362,000 compared with 362,000 also in 2007.

This year using unpublished survey data, Enterprise Ireland reported that estimated employment at client firms was at 192,000 in 2015 and IDA Ireland said employment in foreign-owned exporting firms was at 187,000. the total of 379,000 compares with 356,000 in 2000.

The survey data show that jobs at tradeable exporting firms grew by 6.5% in 15 years while the total workforce (including the unemployed) grew from 1.78m to 2.17m in December 2015, or 22%. 

Employment in indigenous exporting firms, which sells on average 40 to 50% of output in the domestic market, grew from 189,000 employees in 2007 to 192,000 in 2015. 

Indigenous exports account for about one quarter of adjusted exports value but the sector employs more than the foreign-owned sector.

Tourism and travel exports were valued at €4.5bn in 2007 and €3.6bn in 2014 up from €3bn in 2012.

There was stagnant growth in jobs in the international tradeable sectors in 2001-2007 — a rise of 10,000 at indigenous firms was matched by a similar fall at foreign firms — and the recovery in jobs in recent years was mainly to offset a slump in 2009-2011.    


Irish Employment by NACE (Nomenclature statistique des activités économiques dans la Communauté Européenne) in  thousands Change
Agriculture, forestry and fishing (A) -8 26
Industry (B to E) -37 4
Construction (F) -139 19
Wholesale and retail trade, repair of motor vehicles and motorcycles (G) -37 10
Transportation and storage (H) -4  
Accommodation and food service activities (I) 11 23
Information and communication (J) 14 7
Financial, insurance and real estate activities (K,L) -7 -6
Professional, scientific and technical activities (M) 5 23
Administrative and support service activities (N) -14 2
Public administration and defence, compulsory social security (O) -5 -3
Education (P) 12 9
Human health and social work activities (Q) 32 10
Other NACE activities (R to U) 7 7
Not stated -3 4
All NACE economic sectors -173 135
Source: CSO via Finfacts .ie

The European Commission noted in a report on the Irish economy published last week that Ireland is benefiting from its specialisation in pharmaceuticals and information technology services, led by multinationals established in the
country. The share of these sectors in global trade has been expanding in recent years, driving Ireland's export performance above the total demand for imports of its trading partnersthis is misleading because it ignores the impact of tax distortions and the following statement is wrong in respect of the cited 40% share or €44bn:

Goods exports in sectors dominated by indigenous companies account for about 40% of the total and increased by 10.3% in the first nine months of 2015 compared with the same period in 2014. These are typically small and  medium enterprises that have regained competitiveness and benefit from the weak euro when selling to the US and the UK. For multinationals, rising good exports have been  matched by similar increases in goods and services imports.

Intel, the US chip giant, is the biggest firm operating in sectors beyond pharmaceuticals and information technology services.

Jobs in pharmaceuticals + medical devices have grown by about 2,000 in 10 years.

The EC also says that "foreign direct investment inflows in the first nine months of 2015" were roughly 20% up year on yearthis is again a misleading claim as rising cash balances overseas as part of tax strategies can be counted as an FDI inflow!

The internationalisation data on "Irish SMEs" is also misleading as it includes FDI firms.

The Reality Check is that Ireland has a very low level of exporting firms as a ratio of the population — Ireland has about 4,000 exporters; Denmark has about 30,000.

A National Treasury Management Agency (NTMA) paper published last month highlighted that Ireland is too dependent on a narrow range of products and services:

Exports are amongst the most concentrated in Europe with the top 10 goods products (out of 3,900) accounting for 45% of all goods exports. Services exports are also concentrated.

SEE: Just 10 firms paid 50% of record Irish corporation tax in 2015

Last month we argued here that Irish food and drinks exports are far below potential.

Indigenous processing of fish is about 5% of the total catch in Irish waters and an estimated 80% of exports are commodity traded.

Irish fisheries industry and the myth of EU stealing our fish

Last June Alan Matthews, professor emeritus of European agricultural policy at Trinity College, said most beef farms in Ireland are not financially viable without EU subsidies. He recommended that they switch to forestry.

Ireland and Luxembourg have the lowest number of manufacturing firms in the EU28, excluding low single digit employee firms.

The FDI sector remains important for the economy, worker pay and benefits are typically better than indigenous firms, and inflows of capital helped revive the commercial property sector in recent years.

However, there is little significant R&D done and in the rest of the private economy, the majority work in non-exporting firms.

There is a low skilled workforce according to the OECD; a high percentage on low pay according to the OECD again, and OECD data also show poor occupational pension coverage.

Social protection (broadly defined to include several areas of public spending: welfare, health [private + public], social housing, skills training etc.) per capita ranks with France, Germany and Sweden but the standard of living per capita is below Italy's.

FDI data and the underperformance of the indigenous sector is covered here.

Jobs growth sharply slowed in the last quarter of 2015 while Fine Gael had a net new job creation target of 200,000 by 2020 in its election programme. It's easier said than done and developing new export markets is typically a hard slog.

It's time to face the facts not follow the same path of delusion taken by Enda Kenny and his bewildered ministers.