Ibec Survey of Manufacturing identifies the big challenges heading into 2022

November 03, 2021

To coincide with the publication of a major new report on the manufacturing sector entitled ‘Manufacturing in Ireland – Today, Tomorrow and Beyond’, Ibec today published the results of a new survey which shows increased business confidence for the next six months compared and identifies increased costs, supply chain issues and access to labour among the big challenges facing the sector in 2022.
 
Sharon Higgins, Director of Membership and Sectors, Ibec, said “Our report shows the scale 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.”
 
The survey was conducted in October among a broad range and size of manufacturing companies operating in pharma, chemicals, med tech, food and drink, electronics and other sectors, both indigenous and multinational.  While respondents indicated that in the next six months, they expect increases in the cost of energy (95%); raw materials (93%); and wage 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 major challenges for manufacturing in the next six months were identified as cost of energy (70%); transport and logistics costs (64%); attracting and retaining a quality workforce (63%); and availability (62%) and cost (57%) of raw materials.  Interestingly, 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.
 
‘Manufacturing in Ireland – Today, Tomorrow and Beyond’
 
Ibec’s report quantifies the contribution of manufacturing to the Irish economy; 260,000 people are employed in the Irish manufacturing sector, accounting for over 12% of total employment. The sector is responsible for €12.5 billion in wages and employment taxes annually, €1.7 billion of tangible investment and 27%, or over €3 billion, of corporation tax. 
 
“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,” said Sharon Higgins. “This comes from medtech, technology, pharma and many other product lines.  There are clear challenges ahead for manufacturing in Ireland, for example, this week alone, the focus of the entire world is on COP26, seeking agreement on addressing climate change.  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.”

 

 
Manufacturing in Ireland Today Tomorrow and Beyond pdf | 3353.4 kb Ibec Manufacturing Survey pdf | 175.7 kb