IDA creates 23,000 jobs but worries on infrastructure

A record year for jobs: Mr George Fotiades, president and chief operating officer, Cardinal Health, and Tanaiste Ms Harney, at the announcement last year that it would build a $100 million European manufacturing centre in Longford.

IDA Ireland, the State development body, created a record 23,000 jobs last year, up from 17,800 in 1999. Taking into account job losses at IDA-supported companies, the net increase in full-time employment was up 12 per cent at 15,211. The authority predicted more economic growth this year, but at a moderated rate. This would reflect lower US expectations, steady growth in Europe, and some changes in euro-zone and Irish competitiveness.

However, the authority's chief executive, Mr Sean Dorgan, warned that infrastructure problems could seriously undermine economic growth outside Dublin. Balanced regional development could not be achieved without swift action to improve the power, road, broadband and air networks in the regions, he added.

Mr Dorgan said IDA Ireland's focus was no longer on job creation, but on improving the quality of positions it supported through education and retraining. Such a trend was seen in a rise to 40 per cent from 25 per cent in the number of positions in IDA projects with salaries exceeding £25,000 (€31,743).

Such posts were less vulnerable to redundancy than those with lower salaries. Firms supported by IDA Ireland shed 8,100 jobs last year. This was in line with "normal expectations", it said.

Asked about the Republic's exposure to a potential hard landing in the US, Mr Dorgan said investment decisions by major US firms such as Intel and IBM were "long term".

"Volatility in the stock market is very much a reflection of reduced expectations for future profits," he said.

IDA Ireland paid £116 million in grants to 1,266 firms last year. These employed 139,890 people - 15,211 more than a year earlier - and paid £1.3 billion in corporation tax.

Mr Dorgan admitted certain multinational firms had expressed "concern" about the removal in the Budget of the cap on employers' PRSI. He declined to comment when asked whether these firms had asked him to approach the Government on the matter.

While the organisation said half of the jobs agreed last year were secured for Objective One counties in the Border, midlands and west, Mr Dorgan warned that infrastructure deficits meant it was "not going to be easy" to improve on that.

Here, the IDA is mostly concerned with constricted growth capacity on the national electricity grid. "One cannot put a heavy power user north-west of a line between Galway, Carrick-on-Shannon and Dundalk," Mr Dorgan said.

Of the road network, he said immediate improvements were needed throughout the State. The authority also wanted to expand access to broadband telecommunications networks - with high-speed connections to the Internet - into the regions.

Further improvements were needed in the air network so business people could plan to visit and return from a region in the Republic in a working day.