Ireland is resilient but not immune to impact of Covid-19 in an environment where global FDI is likely to plunge 40pc in 2020.
While Covid-19 will impact on multinational investment, Ireland has continued to attract foreign direct investment (FDI) despite the disruption caused by Covid-19, IDA Ireland said today (8 July 2020).
However, while Ireland is looking for the most part resilient, it is not immune and the State agency warns that it is only early days in a prolonged battle against the virus where sectors remain closed and are dealing with a supply and demand side shock.
“In the context of the Covid-19 pandemic, it is encouraging that Ireland has been able to secure a significant number (132) of investments in the first six months of the year”
The pandemic and subsequent shock has impacted some sectors harder than others.
IDA Ireland CEO Martin Shanahan quoted estimates that suggest the impact on FDI flows in 2020 and 2021 will be severe, potentially cutting global investment by up to 50pc.
“While it is too early to say what the ultimate effect of that will be on the out-turn for this year and next, it will undoubtedly exert downward pressure on job creation and increase job losses,” he said.
In the midst of this IDA said that competition for FDI in pharmaceuticals and medtech is intensifying as countries increase their focus on self-sufficiency and security.
Ireland shows 2020 vision
132 new investments were won with associated employment potential of 9,600 jobs. 53 were new investors and 44 expansions from existing companies. 48pc of the projects won were for regional locations.
“In the context of the Covid-19 pandemic, it is encouraging that Ireland has been able to secure a significant number (132) of investments in the first six months of the year,” Shanahan explained.
“These investments were won against a backdrop of our global business being impacted from January in Asia and increased upheaval across all major source markets as the first half of the year unfolded. 132 investments in H1 2020 compares to 140 investments in the same period last year – a 6pc decrease. IDA Ireland expects the Investment Approvals in the first half of the year to lead to 9,600 jobs.
“The figures IDA Ireland is releasing today demonstrate both the strength of our value proposition and the resilience of the FDI sector. That said, there is absolutely no room for complacency, the global economic climate within which we are now all operating remains extremely challenging, with international forecasting bodies predicting significant impacts of the Covid-19 pandemic on global growth, trade and on FDI flows.
“Ireland’s extraordinary FDI performance over the past five years puts us in a strong position going into the Covid-19 crisis and the high value sectors we have pursued provide us with a strong base from which to help to drive recovery once again. Going into 2020, employment levels in IDA’s client companies had reached over 245,000 – the highest ever number employed in the multinational sector, exceeding all targets set by Government contained in IDA Ireland’s Strategy – Winning: Foreign Direct Investment 2015-2019.
“We continue to actively support our client companies through the crisis. The majority of IDA Ireland’s existing portfolio remains functioning either remotely or on-site while adhering to public health guidelines,” said Shanahan.
Looking to the end of 2020 Shanahan said the focus will be on protecting and growing jobs and working closely with client companies to help them retain, transform and position for future growth.
Written by John Kennedy (firstname.lastname@example.org)
Published: 8 July, 2020