A survey by Ibec finds that business confidence for the next six months has increased, but identifies increased costs, supply chain issues and access to labour as the big challenges facing the sector next year.
Respondents said that they expect increases in the cost of energy (95%), raw materials (93%), and wages growth (83%), all of which reflect the inflationary nature of the economy at the moment.
They also reported positive expectations of increases in export sales (60%); productivity (48%); and growth in employment (44%), which reflects the overall increase in business confidence.
The top five challenges for manufacturing in the next six months were identified by 70% as cost of energy; transport and logistics costs (64%); attracting and retaining a quality workforce (63%); and availability (62%) and cost (57%) of raw materials.
Challenges such as managing Covid-related issues (12%), hybrid working (7%), and managing carbon emissions (20%) did not score highly, while taxation was cited as a major challenge over the next six months by only 4% of respondents.
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Ibec membership director Sharon Higgins (pictured) commented: “Our report shows the scale and importance of the manufacturing sector in Ireland. Our member survey shows strong business confidence among manufacturers for the six months ahead, with expectations of increased profitability and growth in employment despite significant cost and supply chain pressures.
“This is shaping up to be a pivotal decade, not just for Ireland but globally. As COP26 gets underway this week and government prepares to unveil its Climate Action Bill, sustainable manufacturing will be critical to Ireland’s ability to hit its climate targets.”
Ibec's Manufacturing in Ireland: Today, Tomorrow and Beyond is a new report which quantifies the contribution of manufacturing to the Irish economy.
“We know the country’s strength in manufacturing exports – 60% of Ireland’s final manufacturing exports are now part of global supply chains, one of the highest such ratios in the world and a hugely significant level of our employment is sustained by this global demand,” Higgins added.
“We believe there is an urgent requirement for a national action plan to address competitiveness in manufacturing, and consolidate and grow our success on the world stage.
“Areas of critical importance include improvements to tax regime issues such as R&D, CGT and the EIIS scheme; support for the ongoing digital transformation of our manufacturing industry and its supply chains; an end to end manufacturing skills strategy; transparent and cost effective regulation; support for measures to deepen the Single Market; and the retention of free access to the UK market.”
Full details of the survey are available here, with the report Manufacturing in Ireland available here.
