Engineering industry says it faces ‘war on talent’ challenge ahead of budget

The engineering industry is facing a range of challenges that threaten its competitiveness, including the tax landscape and the “war on talent”, the sector has said ahead of Budget 2023.

Engineering Industries Ireland, the Ibec group that represents the engineering manufacturing and services sector in Ireland, published its Budget 2023 submission on Friday.

It called on the Government to use the budget to protect the sector’s competitiveness amidst an “exceptionally volatile external economic environment”.

Engineering Industries Ireland director Pauline O’Flanagan said: “Irish engineering technology sectors are highly integrated upstream and downstream, which makes them very susceptible to indirect effects that are felt when demand or supply sectors fail.

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“Like many sectors of the economy there have been indirect consequences of the Russia invasion on Ukraine that have led to enormous increases in the prices of energy, industrial metals and other raw materials.

“In addition, the Covid-19 pandemic continues to have a negative impact on the free movement of goods in our sectors with supply shortages, stock building and increased demand aggravating supply bottlenecks.

“In short, there are many reasons to believe that Ireland’s engineering and technology industries will need to continue to adapt to volatile times. As we face into Budget 2023, the industry is facing a range of challenges that threaten its competitiveness.

“These include the impact of the changing international tax landscape, the war on talent, the impact of inflation on engineering businesses especially small and medium enterprises and increased regulation.”

The group called on the Government to put in place a State-backed export credit insurance scheme and an export credit agency to ensure Irish engineering businesses can compete on a level playing field on the international markets.

It also called for an Improved R&D tax credit scheme to allow smaller engineering firms to participate and support the development of an innovation ecosystem for engineering industries.

It also said the State should encourage and embrace a “progressive and value-driven regulatory ecosystem that sustains the evolution of the engineering industries in Ireland”.