Overseas firms expect turnover increase

ALMOST HALF the multinational companies in the State expect to increase the amount they export next year. A survey by the Irish Management Institute (IMI) and National Irish Bank found 47 per cent of multinationals expect turnover to increase in 2011, while 11 per cent are expecting a decrease.

The survey found that 26 per cent of companies expect to increase the number of people they employ in 2011, but 22 per cent expect to cut their workforce.

It states that the Irish cost base is still significantly higher than comparable locations despite falls in wage and price demands in the last two years. China and India have overtaken the US as competing locations for Irish subsidiaries, with the UK still cited as the greatest source of competition.

Some 39 per cent of respondents said greater workforce flexibility was the most important factor in terms of improving their Irish operation’s competitiveness.

Some 124 executive of companies employing more than 54,000 workers participated in the survey.

Respondents also stressed the importance of maintaining the current corporate tax rate in order to attract new jobs to Ireland.

National Irish Bank economist Ronnie O’Toole said multinational companies appeared happier with the standard of Irish infrastructure than in the past. “This is no longer identified as a problem by the respondents, indicating that large infrastructure spending in recent years is paying dividends.”

Mr O’Toole said the State’s immediate economic prospects were highly dependent on the ability of Irish exporters to take advantage of the upturn in the global economy.

The survey also found that multinationals are operating here at an advanced level of management practice. Levels of interactivity with local firms were often limited, reducing the opportunities for the transfer of this expertise.

IMI chief executive Dr Tom McCarthy said targeted management development and training in indigenous Irish firms was a critical means of transferring best-management practices.