Economy

Ireland’s out of kilter economy cause for concern – The Irish Times


Ireland has close to 12,000 companies exporting goods … but just five of them account for 44 per cent of everything we send abroad. That was the very stark headline on a report published on Friday by the Central Statistics Office (CSO).

The Profile of Trading Entities is a snapshot of economic activity in the State in 2022.

As employees of Intel and the Government wait nervously to hear how the company’s 15 per cent reduction in headcount and $10 billion (€9 billion) slashing of costs will affect an Irish business that sustains the local economies of many towns around Leixlip, the figures highlight once again just how Ireland’s economic fortunes depend on a handful of enterprises, most of them foreign-owned.

The concentration of activity within the 11,769 companies based here that export is eye-opening. Ireland exported more than €199 billion worth of goods in 2022, according to the CSO, and €173 billion of that was exported by foreign-owned enterprises.

If you extend the top five to 10, these enterprises account for 57 per cent of all the State’s exports; if you include the top 100 exporters, you account for 85 per cent. That is less than 1 per cent of all companies that export.

And, as most people would assume, it is the multinational sector that dominates. Irish-owned businesses are responsible for just 13 per cent of the State’s exports with 87 per cent coming from foreign-owned enterprises. Just how disproportionate their impact is becomes clear when you understand that just 18 per cent of those 11,769 exporting companies are foreign-owned.

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This tallies with data from Revenue showing that just 10 big enterprises, including the likes of tech giants Apple, Google and Microsoft, account for almost 60 per cent of corporation tax receipts — a far greater concentration risk for the economy than is the case for other OECD countries. Two of them are widely understood to be individually responsible for 10 per cent of those “windfall” receipts each.

Size matters, it appears, with larger enterprises — those employing more than 250 people — accounting for €8 in every €10 of exports.

Much the same imbalance is evident on the import side of the ledger, if not quite as lopsided. What is also interesting is that one-third of the almost 50,000 companies importing goods into Ireland source those imports in just a single country.

Even allowing for intragroup transfers, that’s a fairly concentrated supply chain.

And for all the diversification of recent decades and the impact of Brexit, the data show that the UK remains a cornerstone of trade for the State.

While coffers are buoyant and Government can consider giveaway budgets in advance of general elections, all is good. But, as the Intel jitters show, we would be foolish to take our current economic success for granted.



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