Irish regional investment enjoys major dividend of US-Irish ties
Announcing the €443 million investment by science and technology company Merck: Mayor of The County of Cork, Cllr Gillian Coughlan; Martin McAuliffe, MD and head of Cork operations, Merck; former Taoiseach, Micheál Martin TD; Matthias Heinzel, member of the executive board of Merck and CEO Life Science, and Michael Lohan, Head of Lifesciences and Talent, Transformation and Innovation, IDA.
Denis Curran, head of property regions and enterprise development, IDA Ireland, reflects on the significant investor appeal of Ireland’s approach to regional development.
2022 proved to be another strong year for foreign direct investment in regional locations.
Despite the backdrop of challenging international economic headwinds and geopolitical events, the level of employment in IDA client companies in regional locations reached a record high of 163,653 an increase of 7% on 2021. US-headquartered companies make a critical contribution to the level of regional FDI. There are 469 US companies employing 116,952 people located across Ireland’s regions accounting for 71% of total FDI employment outside of Dublin.
This positive employment growth was experienced in all regions across the country with each region showing job gains for a second consecutive year.
Underpinning this employment growth is the continued flow of investments into the regions. In 2022, 127 investments were secured for regional locations representing 52% of total of investments secured nationally. Of these investments, 89 were secured from companies based in the US underlying the significant contribution US companies make to regional investment in Ireland.
There was a diverse mix of investment across our manufacturing, technology and services base with significant investments of scale and value won across IDA’s key target business sectors including Pharmaceuticals, Medical Technology, International Financial Services, Business Services, Technology and Engineering. Increasingly we are seeing a growing number of sustainability investments as client companies focus on climate change mitigation and the transition to a low carbon economy.
Many of these regional investments in 2022 were made by US-based companies. Abbott announced it is investing €440m in developing a new greenfield manufacturing facility in Kilkenny and expanding its existing site in Donegal which will result in the creation of 1000 new jobs; NetApp opened its new International Headquarters in Cork creating 200 jobs; Technimark is creating 80 new jobs in a €26m investment in its manufacturing facility in Longford; Lilly is investing €400m in a new state-of-the-art biotech manufacturing campus in Limerick which will employ 350 people; Merck announced the largest site investment in the history of its Life Science business with a €440m expansion of its facility in Cork which will help create 370 new jobs; MSD officially opened Ireland’s largest self-generation solar project at its Ballydine site in Co Tipperary while also announcing plans to build a new oncology biologics facility at its site in Carlow creating 100 new jobs.
The benefits of these new investments combined with the existing regional investor base extend beyond their direct and indirect levels of employment. They also generate significant positive spill over effects for regional economies, indigenous businesses, and local communities. The most recent Irish economy preliminary expenditure figures from 2021, show expenditure by FDI companies located in regional locations totalled €15.1bn, comprising of payroll of €10.1B, Irish materials of €2.5bn and Irish Services €2.5bn.
These investments are hard won. The level of global competition for FDI is increasing. Regions must be competitive in the national and international marketplace. Regional and national stakeholders must continue to work together to create the conditions that enable Ireland and its regions to be competitive and attractive for companies to invest in and scale. We must continue to work together to enhance the carrying capacity, capability and competitiveness of our regions. This is enabled by continued investment in the infrastructure required by enterprise to be successful, in water, power, transport, placemaking and sustainable sources of energy.
The availability of competitive, sustainable property solutions aligned to investors needs is a key enabler for regions to compete for mobile FDI. In 2022 IDA completed construction on advanced building solutions in Monaghan, Sligo and Dundalk and the Advance Manufacturing Centre in Limerick.
In support of the IDA’s continued focus on balanced regional development, we will continue to invest in our regional property programme in 2023. An additional four advanced building solutions in Carlow, Limerick, Waterford and Athlone are targeted for completion in 2023.
Building projects for Sligo, Cavan, Galway, Letterkenny, Mullingar, Drogheda, Longford, Tralee, Oranmore and Castlebar, are at various stages of site identification, design, procurement and planning phases. We will also partner with the private sector and local authorities to add to the supply of property solutions in key locations where appropriate.
2022 was a year of robust growth in FDI investment. However, it is clear that the challenging global environment will add to increased volatility and uncertainty in 2023.
While there has been some contraction recently in the Technology sector, the FDI base is well diversified. FDI employment nationally is at a record high on the back of a decade of continuous growth. Client companies continue to be positive about Ireland’s business environment as highlighted by the level, scale and sophistication of investments won in 2022.
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