Companies in German-Irish business world ‘confident’ for the future

4 Oct 2010

Fifty percent of companies in Ireland that the German-Irish Chamber of Industry and Commerce represents believe that Irish competitiveness has improved in the last three years, a survey by the organisation suggests.

The Chamber, with its members in Ireland, conducted a survey which suggests the Irish economy will grow modestly in the next three years.

Half of these companies also said they will increase employment in Ireland in the next two years. The survey found 40pc will invest in Ireland over that period.

Fifty percent also feel the Irish 12.5pc corporation tax rate is not a significant factor in their decision to stay or invest further in Ireland.

Ireland’s third-largest provider of FDI

The survey results are highly significant, as Germany is the third-largest provider of foreign direct investment in Ireland. German companies employ an estimated 20,000 people in Ireland.

“It is encouraging that most companies within the German-Irish business world are confident about their future both in terms of direct investment and job creation and it is particularly gratifying that 50pc of the companies which took part in our survey believe that Irish competitiveness has improved in the past three years,” said German-Irish Chamber president Helmut Clissmann.

An issue the companies did find was the Irish minimum wage, which 56pc of participants saw as a challenge to their business.

“More than 50pc of the companies which took part in the survey believe that the minimum wage in Ireland is not helpful, as it is high by international standards and therefore influences competitiveness,” Clissmann said.

Ralf Lissek, chief executive of the German-Irish Chamber of Commerce, said 75pc of survey respondents felt it is important for German companies to have actual presence in Ireland if they wish to be successful in the Irish market.

He also said German companies appear to be adopting a more cautious assessment of Irish economic prospects in the coming years.

“The forecasts for Irish economic growth from our members – 1.2pc in 2011, 2pc in 2012 and 2.6pc in 2013 – are more conservative than forecasts from other research institutes and economic commentators,” said Lissek. 

“But this reflects the views of those working at the coalface of business between Germany and Ireland.”

Sectors with most opportunities?

When respondents were asked what sectors offer the most opportunities for Irish companies trading with Germany, 57pc mentioned the food sector, 41pc said the IT industry and 40pc said the services industry.

Some 35pc of participants said the most opportunities could be found in the pharmaceutical industry and 30pc mentioned media technology.

When they were asked what sectors offered the most opportunities for German companies in Ireland, 68pc referred to renewable energy, 59pc said energy efficiency and 35pc said medical technology.

Some 29pc said German companies in Ireland referred to the pharmaceutical industry, 22pc mentioned biotechnology and 20pc said the food sector.

Lissek also said that two thirds of those surveyed were concerned there wasn’t enough being done to encourage the teaching of foreign languages in Irish schools.

“Given the extent of trade between Ireland and Germany, we believe that it would be a good investment if more schoolchildren learned German and more schools offered German as a subject option,” said Lissek.