The chemical and pharmaceutical sector remains one of the most vibrant and rapidly-expanding in the Republic, generating thousands of jobs each year, the Irish Business and Employers Confederation said yesterday.

Publishing the annual report of the Irish Pharmaceutical and Chemical Manufacturers' Federation, IBEC said the industry had a cumulative investment in the economy of almost £3.2 billion (€4.06 billion), but warned of future skills shortages.

According to the report, which uses data to the end of 1997, the chemical and pharmaceutical sector directly employs 10,959 in the Republic. A further 1,694 sub-contractors brings total direct employment in the industry to 12,653.

"The industry estimates that it will give direct employment to an additional 2,317, or a 21.14 per cent increase, between 1998 and 2000, bringing total direct employment to 13,276 at end 2000, and will continue to employ an estimated 4,038 in sub-contracting work, thus giving a total employment level of 17,314 at end 2000," the report suggests.

"In 1997, the industry spent £623 million. Taking an estimated multiplier factor of 1.7, the estimated minimum contribution to the Irish economy was £2.76 billion," it adds.

"The industry had an impressive and massive cumulative capital investment of £3.19 billion, and plans to grant a further £1.88 billion, or 58.9 per cent, in the period 1998 to 2000."

An analysis of those working in the sector shows that half have third-level education and 23 per cent of the workforce is female.

"The industry anticipates that it will have a shortage of 755 skilled staff in 1998 to 2000," the report said.

"There is widescale concern that the industry will not be able to recruit sufficient graduates due to the severe drop in the numbers taking science subjects in the Leaving Certificate, and a parallel decline in demand for places in science in the Institutes of Technology."

At the presentation of the report, the Tanaiste, Ms Harney, said she expected the sector to continue expanding.

"The pharmaceutical industry in Ireland was almost non-existent 30 years ago, but the presence here today of some of the world's biggest names has made Ireland a significant force in the European pharmaceuticals industry," Ms Harney said.