Huge job losses through the closure of Seagate in Clonmel and lay-offs at Krupps and Fruit of the Loom put a damper on IDA Ireland's end of year results, reducing the total net growth in employment from 16,000 to 8,785 this year.
Announcing the agency's 1998 out-turn yesterday, IDA Ireland's outgoing chief executive, Mr Kieran McGowan, said the figures are a "timely reminder" that companies operating in Ireland cannot be immune from developments in the global economy.
"The movement to lower cost locations of certain labour intensive operations because of competitive pressures in the marketplace and the recession in a number of major regions including, in particular, Asia and Russia has impacted severely on a number of companies," he warned.
The State agency, which is charged with attracting international companies to the Republic, reported another record year in terms of job creation in 1998. IDA-backed companies created 16,000 new jobs - the highest number of new jobs created in a single year. The top performing sectors continue to be electronics and engineering companies, which created more than 7,000 of the new jobs. The rapidly growing international services sector also delivered strong jobs growth, creating a further 6,500 in companies in the software, tele-marketing and financial services sector. Over the 12 months a total of 128 international investment projects were negotiated. Some 66 were greenfield projects while the remaining 62 accounted for expansions at companies already established here. A further 115 new projects were secured for Dublin's International Financial Services Centre.
"This is well in line with the ambitious and expansionary targets set for the year and will contribute strongly to new job creation over the next three years or so," said Mr McGowan. The biggest projects were Dell, which announced 3,000 jobs in Limerick and Citibank, which plans to create 1,300 jobs in Dublin.
IDA Ireland paid grants totalling £130 million in 1998, bringing the cost per job to £11,462. The agency also had to contend with substantial job losses. In 1998, 7,200 workers in international owned companies lost their jobs, up from almost 5,000 in the previous year. The closure of Seagate brought more than 1,100 jobs losses, while the closure of Krupps in Limerick added a further 500.
The contribution of IDA Ireland-backed companies to the Irish economy increased by 20 per cent in value terms, with total sales of £22.6 billion, with some £8 billion retained here.
Spending on wages in the multinational sector rose by 17 per cent to more than £2 billion and purchasing of Irish services grew by 14 per cent to £3.3 billion a year. The sector also contributed £800 million in corporate tax to the Exchequer.
The strongest growth in net employment came for within the internationally traded services sector which accounted for almost two thirds of the total net growth in all IDA Ireland backed employment.
