IDA boss moves to calm job fears

The head of the Industrial Development Agency tonight insisted that Ireland would ‘‘break even’’ on the jobs front this year, despite a continuing rash of redundancy announcements.

Sean Dorgan, chief executive of the agency, commented after job loss announcements by the Stena ferry line and an electronics plant in Co Westmeath.

He spoke following a warning from the Paris-based Organisation for Economic Co-operation and Development (OECD) that the Irish economy could deteriorate significantly.

He said foreign companies currently employed 141,000 people in Ireland and the expectation was the job gains would match the number lost in those firms this year.

He conceded: ‘‘This year will be a slower one than any of the past five in terms of results.

‘‘But there are companies still hiring, even in the information technology sector, and in pharmaceutical and health care, as well as international services.

‘‘And by the end of this year, we will have as many people employed in the overseas companies as there were at the end of last year.

‘‘That means that the gains of the past five years will be retained, even in the face of a global slowdown.’’

Mr Dorgan forecast: ‘‘We will win some significant investments in the next six months.

‘‘We expect we will just about break even this year on jobs, which is not a bad performance.

‘‘It’s difficult to forecast next year, but our best assessment is that we should at least break even again.’’

Earlier, the OECD warned that Ireland’s competitiveness would suffer if wages continued to grow rapidly and the imminent euro common currency strengthened in value.

The organisation, which six months ago said Ireland’s growth rate would slow to 7.75% this year, from 11% last year, revised the figure down to 5.5%, with another drop, to 3.75%, in 2003.

Their report pointed to the global economic downturn as the key factors for the reverse, with the country particularly vulnerable because of its reliance on the hi-tech sector.

The OECD findings - published less than three weeks ahead of finance minister Charlie McCreevy’s scheduled budget statement to the Dail - said tax receipts and the budget surplus were dropping sharply, although inflationary pressures were easing.

But they predicted a budget surplus of 1.5% of gross domestic product this year, falling to 1% in 12 months time, and stressed the need to carefully monitor current spending.

And the organisation warned: ‘‘Policy needs to continue to focus on improving human capital and the provision of infrastructure.

‘‘But it will need to be supported by moderate pay increases in the private sector to maintain competitiveness.’’

The report said the worldwide downturn could be attributed to the September 11 terrorist attacks on the US as until that date the slump in the US economy had shown signs of relenting.