Housing availability 'not a huge constraint' in FDI decisions

IDA chief says infrastructure remains critical for attracting foreign investment into Ireland

IDA chief executive Martin Shanahan: 'I expect to be announcing fairly positive figures for the first half of the year and the outlook for the second half looks reasonably positive as well.'

IDA chief executive Martin Shanahan has said that the availability of housing is a constraint, but not a huge one, in foreign companies’ decisions to invest here.

Answering a question at a Shannon Chamber of Commerce lunch at Dromoland Castle on the availability of housing acting as a constraint on companies’ decisions to invest in Ireland Mr Shanahan said: “It is definitely a constraint, there is no question.

Investors are keenly aware of the housing market in Ireland both in urban locations and indeed outside urban locations

“I don’t think it is acting as a huge constraint yet because investors can also look at the data and look at the plans that are envisaged by Government in terms of increasing housing supply,” Mr Shanahan added. 

He said that infrastructure, including the availability of energy, remained critical in terms of attracting investment “and from my perspective those issues which are likely to cause us most challenges are around infrastructure”.

OECD tax framework

Mr Shanahan said that rather than Ireland losing foreign direct investment (FDI), it has seen an increase in FDI since the Government’s decision to sign up to the OECD's framework on tax.

He said the framework "has given us a new level of stability" and a new rate of 15% for companies with revenues over €750m.

“I said at the time that I did not believe that it would not have an impact on the flow of investment 

I can tell you absolutely at this point that it has had no impact at all and we have seen a reverse in fact — we have seen an increase of investment in recent months and last year

Mr Shanahan said that the outlook for FDI “is reasonable” and that the strong flow of FDI from last year has continued this year.

Mid-year results

He said when announcing the IDA mid-year results with Tánaiste Leo Varadkar in the coming weeks: “I expect to be announcing fairly positive figures for the first half of the year and the outlook for the second half looks reasonably positive as well.”

Mr Shanahan said that FDI has continued to perform in this economy to an extraordinary degree, remarking that “FDI did not miss a beat during the pandemic”.

We ranked seventh of Europe for announced projects last year and for a country of our size that is an astonishingly good performance

Mr Shanahan said that the 1,700 FDI companies here “represent a core national asset”.

Non-urban opportunities

On the changing operating models of companies due to Covid-19, Mr Shanahan said that it would present opportunities for non-urban areas where regional locations can advertise a very positive work-life balance.

However, he said: “The future of the city though is not over. Just to be clear, there will still be city locations that will prove very attractive and there will be office buildings required for reasons for driving culture, driving training, onboarding staff.”

Mr Shanahan said that talent availability is still the number one consideration for companies deciding to invest here.

He said that it was "one of the reasons that we are winning investment because Ireland looks a little better than other countries because we are so open and welcoming and it is easier frankly to get work permits and visas for Ireland than other locations".