Honeymoon over for Ireland and US companies — survey

25 May 2006

Labour shortages are impacting on the ability of US companies in Ireland to win new investment projects, according to a survey by the American Chamber of Commerce in Ireland.

Some 43pc of the companies surveyed indicated that Ireland is no longer a preferred location for further investment by their companies while 41pc indicated that Ireland is not as attractive a location for investment compared to when they first set up business. A quarter of the companies surveyed also said that further investment in Ireland has already been lost as a result of either the cost or availability of labour.

“It is clear from the survey responses we are getting from our members that their head offices in the US are becoming more and more aware of the labour shortage in Ireland. There are examples of projects being delayed and clear evidence that a sizeable number of companies who are already in Ireland will look elsewhere for further investment,” said American Chamber of Commerce president Dr Fraser Logue.

Respondents to the survey said that they were experiencing difficulty in recruiting across various disciplines including science, engineering, finance, quality as well as general operatives. Logue said the decision by the Government to open Ireland to workers from the new EU states was a wise one. “We need these workers to continue to drive growth and economic success.

Apart from the availability of skilled workers, other concerns for US companies were the flexibility, productivity and cost of labour. “A pillar of Ireland’s economic success has been the flexibility of our labour force to adapt to changing market conditions. That flexibility, together with increased productivity levels, are a strong defence when other lower cost countries compete against us for new investment projects,” Logue said.

On a whole, most US companies still believe Ireland is a good place to do business despite these issues. Some 96pc said that Ireland is still a good location to do business. Some 30 of the 50 companies surveyed plan to recruit additional staff this year, creating over 1,200 jobs.

The survey by the American Chamber of Commerce in Ireland involved more than 50 companies of all sizes in various industrial sectors employing more than 16,000 people.

By Niall Byrne