Slower jobs growth likely in 2023 as companies exercise caution, says IDA

IDA Ireland reported positive employment results for 2022, but there is an air of uncertainty following the recent tech layoffs.

The number of people directly employed in Ireland’s multinational sector has hit a new high, reaching 301,475.

That’s according to IDA Ireland’s 2022 annual report, which said there was a 9pc increase in total employment in its client companies over the past year.

The Government agency responsible for foreign direct investment, development and job creation said it won 242 investments during the year, nearly half of which were new name investments.

But it also warned that slower growth is likely in 2023 amid economic uncertainty. The increase in employment across its client companies comes at a time when many multinational tech heavy hitters have been announcing job cuts across Ireland.

The report’s results are preliminary and do not go beyond 31 October 2022. This means the data precedes the mass layoffs announced by companies such as Meta, Stripe and Twitter.

While IDA Ireland’s report said that job losses remained at “historically low levels” in 2022, the agency addressed the recent Big Tech layoffs.

Mary Buckley, interim CEO at IDA Ireland, acknowledged that “the challenging and volatile international environment that we saw in 2021 escalated this year”.

IDA Ireland also reported record results in 2021, with employment from foreign direct investment (FDI) at an all-time high that year.

Outlook for 2023

While both Buckley and Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar were keen to highlight the positives of this year’s results, they said that the outlook for 2023 may not be so rosy.

Varadkar said the report showed that Ireland continues to be seen as “a location of choice for new investors and long-established companies who chose to reinvest in substantial expansions of their operations here”.

However, he added that “Ireland has not been immune to the challenges created by global events of recent months, and we expect those to continue into 2023”.

“I know it’s a difficult time for people working in tech companies as we enter the Christmas and New Year period. My office is in close contact with the companies involved and we are working with them to minimise the impact on people’s livelihoods and the wider economy.”

Not dwelling on the tech job losses, Varadkar highlighted that there is “a good pipeline” of new investments from sectors such as life sciences, manufacturing and aviation to come in the next few months.

FDI will remain central to the Government’s economic strategy over the next few years, he added.

He also said he was happy with the spread of investment in regions outside Dublin, adding that continued development of this would be prioritised for the future.

Cautious approach amid uncertainty

Buckley said she predicts companies will “adopt a cautious approach”, with slower growth likely in 2023 and less clarity for the second half of the year.

“The now-evident severe headwinds facing the global economy in 2023 means we will have to work harder than ever in the year ahead to win new investment. Our FDI base of companies is also subject to these headwinds.”

Buckley promised that IDA Ireland will remain close to its clients at this time of uncertainty and support companies as they review their global cost base to remain competitive.

“We continue to see opportunities across and within our sectors of focus, which we believe remain well aligned to the global economy of today and well positioned to succeed in the transformed economy of the future,” she added.

“At the same time, we will continue to seek out and exploit opportunities in new and emerging growth areas in an evolving investment landscape.”

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