IDA chief still optimistic on attracting foreign firms

THE HEAD of the IDA has said the State agency is "guardedly optimistic" about attracting more foreign companies to Ireland this year, despite overseas firms cutting more jobs than they created in 2008 for the second year running.

IDA chief executive Barry O'Leary said the outlook for foreign direct investment into Ireland was "good" over the next three to four months, but that global economic conditions made assessing future prospects beyond that "very unpredictable".

Concerns are growing that one of the largest foreign employers in Ireland, computer maker Dell, might reduce its workforce from about 3,000 to between 750 and 1,200, and that an announcement could be made in the coming days.

Mr O'Leary said the IDA has been "conscious that there was an over-reliance in Limerick on ICT and particularly Dell".

He said the IDA had been in "constant contact" with Dell since it announced plans last year to reduce its costs significantly. He said IDA-backed firms had created just over 900 new jobs in the Limerick area over the past 12 months.

Mr O'Leary added that all regions of the country were "priority areas" for the IDA, but that "clearly some areas are a higher priority than others", citing Limerick and Waterford where 800 jobs are at risk at luxury goods manufacturer Waterford Wedgwood, to which a receiver was appointed on Monday.

New jobs announcements were expected over the coming months, said Mr O'Leary, starting with two next week involving "a couple of hundred jobs between them".

There were 130 investments last year by IDA-supported firms but Mr O'Leary said he didn't expect the same number this year.

"I wouldn't see 130. What we would be aiming for is around the 120, but in the same way as a company might give a profits warning, we are going to review it on a quarterly basis," he said.

The IDA attracted more projects than it expected last year as it secured investments by IBM, Facebook, Coca Cola and the first Chinese firm to invest in Ireland as the technology company Satir created 40 jobs in Dundalk.

IDA-supported overseas businesses created 8,837 jobs in 2008, down from 9,200 the previous year, while the number of jobs cut at foreign firms rose to 10,044, or 7.4 per cent of employees in companies backed by the state agency.

"We would think, given the global economic environment, that that is a solid performance," said Mr O'Leary. He cited higher job losses in the dotcom bubble, peaking in 2001 at 12.7 per cent of staff at IDA-backed companies.

About 136,000 people were in full-time work at IDA-supported companies at the end of 2008.

Recent pay cuts of up to 15 per cent had helped improve Ireland's competitiveness, said Mr O'Leary.

"There is no doubt that salary levels have gone out of line in recent years," he said.

The IDA is considering opening offices in Brazil, Russia and the Middle East, adding to its existing 15 overseas offices.

The number of new investments rose to 130 last year from 114 in 2007, with about €2 billion being invested. New companies were behind 35 investments, while 95 investments were made by foreign firms already operating in Ireland.

Some 70 per cent of the investments were made by US firms.