Immediate action on rising costs urged in report

A NEW report on the manufacturing sector has urged the Government to take immediate action to address rising costs.

The report of the high level group on manufacturing said that there was a consensus that the immediate challenge facing manufacturing firms in Ireland was the loss of cost competitiveness.

"While we acknowledge that some of the cost increases suffered in recent years are outside Government's control, and that Ireland's rapid economic catch-up had some impact on the rate of inflation, we stress that those that are within domestic control should be tackled as a matter of urgency", it said.

The report says that issues such as the rate of cost increases in energy, waste management, local authority and development charges and bills for legal and accountancy services were "of critical importance to the sustainability of the manufacturing sector". Government

The report urges that steps are taken in the immediate term that will bring energy costs back into line with other EU countries.

It also recommends that enhanced financial supports should be offered to companies to assist them in the drive towards increased energy efficiency and calls for the implementation of reforms recommended by the Competition Authority for a number of sectors providing professional services to firms.

It says that restrictions on competition result in inefficient delivery of services or artificial inflation of prices.

The report also proposes a number of recommendations for improvements within firms.

It urges that firms should be supported in engaging in innovation and increased productivity - not only in products and services but also in organisation structures and management to stimulate innovative thinking and flexibility.

It recommends that national manufacturing competence centres should be established to actively engage with industry both in large and small companies, to address the current and future needs of production as well as to address training and re-skilling needs. The report also calls for support for business and workplace innovation to be developed and intensified to include "incentives for business process re-engineering, change management, organisational change, market development capability and new business model development."

It recommends increased resources for the provision of courses for people in work with a focus on the development of skills.

The report also urges that a new Manufacturing Forum should be established by the social partners to drive the individual actions required at the level of Government and individual firms.

The high level group, which drew up the report, was established under the social partnership process following the national agreement, towards 2016. It comprised representatives of the Government, manufacturing firms and trade unions.

The report says that there are 221,000 people employed in manufacturing and that the sector contributed one third of the corporation tax yield in 2005.

KEY POINTS

• Government should tackle rising costs that have been facing the sector, such as energy, waste, professional services and local authority charges.

• New national manufacturing competence centres to address the current and future needs of production.

• Supports for business and workplace innovation should be developed and intensified to include incentives for business process re-engineering and change management.