Exports key to growth in employment

ALMOST half of all Irish jobs are supported by exports, according to a new study commissioned by the Irish Trade Board.

The study - Exports and Employment: the Irish Perspective 1985-95 - also states that the idea of growing unemployment in Ireland is a fallacy and claims a definite link between growing exports and more jobs.

The report, written by economic consultant Dr Peter Bacon and Dr Brendan Walsh of UCD, determined that all growth in national output could be explained by export growth.

Dr Walsh pointed out that the prospects for expanding employment and improving living standards were increasingly dependent on exports. This meant competitiveness was becoming more crucial to Ireland's economic health.

An estimated 440,000 jobs are directly or indirectly supported by exports, according to the report. This includes virtually all Irish manufacturing jobs, one job in seven in services and more than 100,000 jobs in agriculture.

In 1985, one job in three was supported by exports; this rose to two jobs in five in 1990 and to almost one job in two in 1995.

At the same time, exports have been dominating more and more of Ireland's national output. They are expected to account for around 81 per cent of gross domestic product this year from 60 per cent in 1985. Even if profit repatriation by multinational companies was taken out of the equation, the annual contribution of exports to GNP would fall by only 1.2 percentage points.

The report's authors also found that there was a direct correlation between non-agricultural private sector employment and GDP growth. For every 1 per cent, growth in exports, there was almost a quarter-point increase in jobs, Dr Walsh said.

Between 1985 and 1995, total employment in Ireland increased by 14.5 per cent. However, if agriculture, the public sector and job schemes were taken out, this increases to 30 per cent jobs growth. Over the same time, Irish GDP grew by over 55 per cent.

This is despite the fact that all sectors are using fewer people to produce more goods. In 1985, every £1 million of exports supported 54 jobs by 1990, this had fallen to 37 jobs.

"The sheer volume increase in exports has more than made up for the fall in job intensity," Dr Walsh said. However, growth affects different sectors of the economy in varying ways. Food is the most labour-intensive sector, while high-tech companies take on fewer people for the same volume increase in exports.

According to Mr Alan McCarthy, chief executive of An Bord Trachtala, the report underscores the reality that Ireland has one of the most international economies in the world.

"Irish companies are becoming more global in their outlook and this also applies to the indigenous small and medium enterprise manufacturing and services sector, which is achieving most of its growth in overseas markets and particularly continental Europe," he said.