Business

Half of US firms warn housing shortage biggest barrier to investing in Ireland

Overwhelming majority of companies see issue as ‘extremely or very challenging’ for staff

An AmCham report indicates that US companies in Ireland directly or indirectly employ 378,000 people. Photograph: Eric Luke

Eoin Burke-Kennedy
Ian Curran
Wed Mar 20 2024 - 10:54

The housing shortage is by far the biggest problem for US firms doing business in Ireland, with almost half of companies warning it is the biggest obstacle to investing here.

About 49 per cent of American Chamber of Commerce Ireland (AmCham) member companies said housing is the most important challenge to overcome for their company to invest and expand in Ireland, the chamber said in a statement. Some 98 per cent of firms said the shortage is an issue for workers in their Irish operations, while nearly three quarters described the issue as “extremely or very challenging”.

While the figures are a marginal improvement on a year ago, the survey highlights the issue’s potential to crimp foreign direct investment (FDI).

A slew of companies have already bought homes to house staff, while IDA Ireland chairman Fergal O’Rourke warned last month that Ireland needed 50,000 new homes per year by 2025 to stay attractive – far above the 32,000 homes completed last year.

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AmCham member firms employ about 378,000 people directly or indirectly in Ireland, and spend more than €41 billion here per year, according to the chamber.

Aside from housing, cost competitiveness and personal tax competitiveness were the next most important challenges, the chamber said.

“While our member survey points to some of the challenges that need attention if Ireland is to win further FDI in a competitive global environment, I am confident that our member companies will continue to thrive, develop and contribute strongly to the Irish economy,” said AmCham chief executive Paul Sweetman.

Still, a majority of US firms in Ireland expect to hire more staff in the coming year. The organisation’s latest US-Ireland business report, which was launched at an event in Croke Parkon Wednesday, indicated that 56 per cent of US companies here said they expect the number of employees in their Irish operations to increase over the next 12 months, while 35 per cent expect to maintain current numbers.

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Speaking at the event, IDA Ireland chief executive Michael Lohan said the depth and breadth of talent in the Republic’s economy remained a key driver of US investment here. He said the “singular point” that always comes across from investors is talent, “the availability of talent and the productivity of the Irish workforce”.

However, Mr Lohan added that Ireland’s “pro-enterprise” policy environment remained an important selling point. “We have to ensure the policy environment enables enterprise to do what enterprise does best, which is innovate.”

The positive sentiment comes amid a spate of high-profile lay-offs in the tech sector.

Despite a global slowdown the report indicated record levels of investment and growth between Ireland and the US. Aside from US investment here, Ireland is the ninth largest FDI investor in the US, with 500 companies employing 98,000 people across all 50 US states.

All of the companies surveyed said certainty with regard to the availability of highly skilled talent was important to maintaining FDI employment in Ireland. Some 94 per cent of respondents also saw reform of the planning system as important to providing “certainty of process and time frame for their business’ growth and expansion”.

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times

Ian Curran

Ian Curran

Ian Curran is a Business reporter with The Irish Times

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