Coveney optimistic about economic outlook but warns of likely setbacks as multinationals downsize

While the economic outlook for 2023 is challenging, the Irish economy is starting from a strong place and is unlikely to experience a full-blown recession, Minister for Enterprise, Trade and Employment Simon Coveney has said.

Speaking at the launch of Enterprise Ireland’s latest annual report, which showed firms backed by the agency created an additional 20,000 jobs last year, Mr Coveney said the economy here had “a very strong base of resilient, tech-orientated” companies which “we can continue to support and build on”.

However, he warned the deteriorating economic outlook internationally was likely to bring “setbacks” in terms of the job losses.

“I think we will see disruption . . . that’s not a surprise, a lot of countries are going into recession this year . . . we’re not and we’re going work hard to make sure we don’t,” he said.

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“Is this year going to be easy? I don’t think so . . . there are real challenges . . . we’ve seen some announcements over the last number of weeks, we’ll get more detail on that in the next few weeks particularly in the context of Amazon,” Mr Coveney said.

Amazon has become the latest big tech company to announce lay-offs in the face of a global slowdown with up to 18,000 jobs expected to be cut globally. The company announced the closure of three UK warehouses on Tuesday, affecting1,200 jobs. Despite employing more than 5,000 here, Ireland is not expected to be a major target for the job cuts.

Mr Coveney said Government officials were in regular contact with the company but he had no information as yet about how its global decisions were going to affect Ireland. He said he expected there would be some impact.

The Minister also noted that US investment bank Goldman Sachs had also announced job cuts, suggesting the current reversal was not exclusive to the tech sector.

Despite the uncertain backdrop, Mr Coveney said he still expected the Irish economy to continue to grow this year while many other peer countries fall into recession.

On the issue of housing and how the continuing shortages might affect the outlook for business, Mr Coveney said the targets for 2022 and 2023 would be met, even exceeded “but it’s not enough, not close I’m afraid”.

Enterprise Ireland’s latest annual report show client firms employed 218,178 people in the Irish economy in 2022. More than two thirds (68 per cent) were based outside the Dublin region.

Agency-backed companies created an additional 19,660 new jobs last year despite a significant slowdown in global growth. When jobs lost are taken into account, the net increase in employment was 10,841 or 5 per cent. The agency’s report also noted there were 161 early stage company approvals or start-ups with funding in 2022.

“I am delighted to announce that 2022 was a strong year with our client companies creating 19,660 new jobs, growing net employment by 5 per cent,” Enterprise Ireland chief executive Leo Clancy said.

“This compares favorably with the latest CSO (Central Statistics Office) Labour Force Survey for 2022 which showed an increase of 3.4 per cent in total employment across the economy,” he said.

“Of note is the significant growth in key sectors of the economy ranging from life sciences, prepared consumer food to technology and services,” Mr Clancy said.

“Supporting Irish-owned companies to achieve greater scale and expand their global footprint is a priority for Enterprise Ireland in 2023 and we are committed to supporting Irish companies on their journey to become global leaders in their field,” he said.

“This will ensure that Irish enterprise continues to create and sustain jobs, providing a platform for strong economic growth into the future,” Mr Clancy said.