In this era of gloom, even the tiniest sliver of positive economic news has to be applauded.
That certainly applies to the latest report showing Ireland is bucking international trends and is now the only country in the EU whose manufacturing sector is growing.
A welcome psychological boost for the economy, the NCB Purchasing Managers index — a highly reliable indicator — estimates that output hit a 15-month high in July, with the service sector turning in an exceptional performance.
Having said that, however, a note of caution is advisable because some of the biggest pharmaceutical companies in the engine room of Irish industry are entering a critical phase in their lifespan here, a development which could have profound repercussions for future employment prospects.
Ominously, with so-called “blockbuster drugs” coming off patent, redundancies are inevitable and are already happening in the sector. A serious question mark must be hanging over some of Ireland’s most lucrative pharmaceutical operations.
Their importance can be seen as the first casualties are counted at the Cork-based divisions of Pfizer where 177 jobs will be axed in two plants with a workforce of 900. Overall, Pfizer employs 4,000 people at six manufacturing sites, a treasury centre, a commercial group, and a services centre in Ireland.
Among the first multinational corporations to locate here in the early 1970s, the time limit on some patents is now a big problem for the company. In common with other groups, demand is falling for one of its best-sellers, the cholesterol lowering drug Lipitor which is now off patent, because people can get cheaper generic products with similar results. For thousands of Irish cholesterol sufferers, the fact that a product costs less money is an important consideration.
While Pfizer’s assurance that Ireland remains a key strategic location is welcome, the dogs on the street know when profits begin to fall, it only takes a stroke of a pen in a US boardroom to shut down an operation in Cork, Dublin or Galway. Hopefully, that will not happen for many a day but it can never be ruled out.
The redundancies bubbling in the Pfizer pipeline are a worrying reminder of the lessons that must be drawn from the property bubble which became a wrecking ball for the Irish economy — the danger of putting too many eggs in the one basket.
Meanwhile, the encouraging aspect of the manufacturing index is that growth has risen above the dividing line between expansion and contraction, an upbeat trend during the past five months despite having fallen steadily before that.
While it is heartening that Irish manufacturers are outperforming their European counterparts, it is nevertheless worrying to see the pace of job creation slowing down here.
What many people will find particularly discouraging are the new figures from the Central Statistics Office. While they reflect a fall of 2,300 signing on the Live Register in July, the seasonally adjusted figures show the army of people in the dole queue is 437,300, an unemployment rate of 14.8%.
Despite the buoyancy of the manufacturing sector, the persistent level of unemployment is a depressing sign of the times and demonstrates beyond any shadow of doubt that the coalition’s much vaunted job creation programme is simply not working.
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