American Chamber warns industrial unrest could damage Ireland’s international reputation

A summer of discontent on the industrial relations front could damage Ireland's economic recovery and international reputation, American Chamber of Commerce president Peter Keegan has warned.

He said Ireland had seen industrial unrest in the state sector over the past few weeks for the first time in many years, adding that the ongoing negotiations over the national pay agreement gave rise to concern.

“Industrial peace has been an essential feature of our path to economic recovery and untold damage to our international reputation could result if we enter into a summer of discontent.”

Mr Keegan said many don’t fully understand the importance of the hard-won global reputation of Ireland’s workforce when it comes to attracting foreign direct investment to the country.

“An indication of the increased importance of our people can be found in our export statistics where services exports now account for 52 per cent of total exports. Services are firmly based on people and this stellar performance is firmly rooted in the flexibility of our labour force which has played a critically important role in helping Ireland adapt so rapidly to the changed circumstances we have found ourselves in.”

He said the adjustments Ireland has made since the recession started would probably have been beyond the reach of most other developed countries.

Addressing business leaders at the American Chamber’s spring lunch, he also highlighted the need for continued improvement in Ireland’s cost competitiveness, pointing out that a range of costs from energy to labour were still above the EU average.

“In 2009 Irish prices were 16 per cent above the EU average. We are now down to less than 8 per cent above EU average. Our labour costs are still high though coming in at 6 per cent higher than the EU average.”

Mr Keegan, who is also the chief executive officer at Merrill Lynch International Bank, said the most pressing challenge facing the business sector is how it can improve international competitiveness as competition for FDI is increasing.

American Chamber chief executive Joanne Richardson said Ireland, along with the UK and the Netherlands, continues to be among the top three countries attracting US companies to Europe.

“Since the economic downturn in 2008 there has been increased US investment in Ireland. US companies now represent over 26.5 per cent of Ireland’s GDP.”