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The tech downturn, what downturn?

Central Statistics Office figures show services exports hit a record €340bn last year

Data in recent weeks point to what Minister for Finance Michael McGrath described as the 'underlying resilience' of the sector. Photograph: Getty Images

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Cantillon
Tue Dec 12 2023 - 06:00

When tech companies started laying off staff last year, Ireland, which housed the who’s who of big tech, looked like it would be adversely hit. Meta, Twitter (now rebranded as X) and Stripe announced job losses in the Republic while Apple and Google announced global hiring freezes.

The narrative was that tech firms had overexpanded in response to a surge in demand during lockdown when everything from work to shopping went online. Now they were “right-sizing” in the face of weaker demand and a global downturn linked to higher interest rates.

Data released in November 2022, showing the number of people listed as employed in the information and communications technology sector here had fallen by 11,000, confirmed our worst fears. One agency predicted that up to €34 billion could be wiped off the value of the Irish economy.

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We might have raised a white flag prematurely, however. A sequence of data points in recent weeks point to what Minister for Finance Michael McGrath described as the “underlying resilience” of the sector.

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[ Tech sector employers anticipate further job losses in early 2024 ]

Central Statistics Office figures in August showed that despite the high-profile lay-off announcements, employment in the tech sector here rose on an annual basis by 8,500 to 173,400.

Then last week, we had exchequer returns, which showed the Government collected a record €6.3 billion in corporation tax receipts in November alone, defying predictions for a big reversal in revenue.

The strong performance was linked to better-than-expected earnings in the tech sector with Meta, Google and Intel, which are among the biggest taxpayers here, posting stronger earnings estimates for the year as a whole.

And yesterday we got confirmation that our service exports hit a record €340 billion last year. The figures show computer services exports — at €195.7 billion (up from €174 billion in 2021) — accounted for 58 per cent of the total services trade last year.

Is there a lag factor or was the retrenchment overblown in the first place?

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