Employment in State-assisted foreign firms rises by 0.2%

THE NUMBERS employed in foreign companies assisted by State agencies increased by 0.2 per cent last year, according to Forfás, the State’s economic advisory body. The figure is in stark contrast to last year’s economy-wide decline in total employment of more than 4 per cent.

In a report seen by The Irish Times,the number of jobs in assisted foreign firms last year stood at just under 155,000. This amounts to approximately one in eight jobs in the Irish economy.

Foreign firms in the services sector added more than 2,200 jobs last year and had a total of 65,561 people on their payrolls in 2010.

Although the employment shock suffered by such firms during the 2008-09 recession was less severe than in most other sectors, employment remains below the 2007 peak (see chart).

The gains in the services sector in 2010 offset further job losses among foreign companies in the industrial sector, most of which are involved in manufacturing. These companies shed 1,000 jobs in 2009 compared to the previous year. In 2010 they employed just under 89,000 people.

Foreign-owned industrial companies have laid off a higher proportion of their workforces during the recession than their counterparts in the services sector. The numbers they employ has fallen by one quarter since figures were first compiled in 2001 (see chart).

There was also a shift from full- to part-time employment in 2010. The number of full-time positions shrank slightly last year, but this was more than offset by an increase in the latter.

A more detailed breakdown of the figures shows that foreign computer companies in both goods and services sectors expanded their workforces in 2010. This reflected strong growth in the IT sector internationally.

In total, these firms increased total employment to just over 60,000, up 1,850 on 2009.

Forfas’s detailed jobs figures provide further evidence that there has been limited feed-through to jobs numbers even in some of the sectors which have increased output. Foreign-owned companies in the chemicals sector reduced their total head count last year (albeit by a small amount). This came despite separate figures from the Central Statistics Organisation showing that the volume of chemicals manufactured, which is accounted for overwhelmingly by foreign companies, grew by more than 17 per cent last year.

That said, such companies remain one of the largest foreign owned employers (see chart) employing 21,500 people in 2010.

Forfas’s report also provides details on the job count among Irish companies assisted by the State agency Enterprise Ireland. Total employment among these firms fell by 2.2 per cent in 2010, matching more closely the trend across the wider economy.

There was also a clear difference between Irish services firms and their industrial counterparts. Whereas services companies shrank payrolls by just under 1 per cent in 2010, companies in the industrial sector cut total employment by almost 3 per cent over the same period. Most industrial sub-sectors cut jobs last year.

Among the notable exceptions to the trend was the important food sector. Irish-owned companies in the sector expanded employment by more than 2 per cent, to 36,749 people.