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Exporters priorities to ensure export growth
Ireland’s competitive position as an exporting nation has been severely eroded over the past 5 years, according to the Irish Exporters Association in their ‘Priorities for the next Government’ document .
According to Mr John Whelan, Chief Executive of the IEA, the booming construction sector over the past five years has masked the decline in merchandise exports. In that period merchandise exports fell by €3.9 billion and employment fell by 28,000.
“In earlier decades such a decline would have had an immediate impact on Exchequer funding and immediate action taken to address the reasons for the fall,” said Mr Whelan.
Mr Whelan said that Ireland is no longer a low cost economy as pay costs have increased at a rate double that of the other EU 15 countries. He noted that non-pay operating costs – electricity, waste disposal, industrial and office accommodation – are also rising far faster than our European competitors.
“When all of that is considered with the fact that road, seaports, airports and ICT infrastructure are all below the standards of advanced economies it is easy to understand why Irish exporters have suffered a significant loss of international price competitiveness,” said Mr Whelan.
The Irish Exporters Association believes that regaining competitiveness will require many changes. It will require changes in industrial relations practice, changes in the balance of capital investment, changes in the speed and direction of new product development, changes in attitudes towards energy usage and changes in inflationary control mechanisms. “These changes cannot be achieved by export industry alone, a new focus from a new government will also be necessary,” said Mr Whelan.
The Irish Exporters Association forecasts strong growth opportunities in the decade ahead, but fears that these growth prospects may not be realised unless the many internal barriers to growth are tackled urgently, efficiently and effectively. It’s put forward a list of priorities, and says that wage inflation in the public sector has been a major factor behind the general excessive wage inflation affecting both the manufacturing and services sectors. “The new government must commit to benchmarking Irish wages against wage levels in our trading partner countries, for both public and private sector employment.”
The IEA also says that the National Development Strategy 2007-2013 must be revisited to provide provision for Ireland’s seaport development. “Airports, especially Dublin, must be refurbished and enlarged as a matter of urgency and regional airports must be upgraded. Rail freight must be given a higher priority and the decision of Irish Rail to abandon its freight service must be reversed to ease congestion at ports and on our roads. A more extensive next generation nationwide broadband network must be a priority of the new government to bring broadband penetration in Ireland up to the standards in our main trading partners.”
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