Foreign Companies Accounted For 91% Of Irish Exports In 2006

Service exports continued to grow, bouncing back from a poor performance in 2005 to increase by 15.6% in 2006.

For the first time in over 20 years, Irish-owned manufacturing companies recorded higher export growth than foreign-owned corporations, increasing their exports by 10% in 2006.

Despite this good news, foreign-owned corporations still dominate the export market, accounting for 91% of the total Irish exports last year.

Food and drinks manufacturers were big winners last year with export growth growing by 8% and 14% respectively. Exports of Magner's cider to Britain accounted for a large part of the drinks industry increase.

Exports to Britain, Germany, France and The Netherlands were flat while those to Asia fell substantially due to increased competition from China.

Service exports increased by 15.6% to account for almost 40% of total exports in 2006. The increase leaves Ireland as the 10th largest global services exporter.

John Whelan, CEO of the Irish Exporters Association said: "Services exporters are thriving on the continued rapid growth in Global Trade which increasingly is driven by service related products such as software, financial derivatives, R&D, education and consultancy.

"However", he warned "they are not immune to inflationary cost increases above their trading partner norms, or adverse exchange rate fluctuation.

"The increase in R&D actively in companies large and small is giving a very positive push to services exporting. But more is needed to be done to give tax incentives for specific services sector R&D."

Major multinationals such as Microsoft, Oracle and more recently Google and E-Bay are driving the sector, but also there has been significant growth from the wide range of Irish owned smaller software companies, who grew exports by 13.3% in 2006.

Chemicals and Pharmaceutical companies grew their exports by 4.7% to €42.2 Billion in 2006, that sector now accounting for 48% of total merchandise exports. The Association warned that there were infrastructure gaps that needed addressing if this growth was to be maintained.

Exporters were generally bullish at export opportunities for 2007, saying it offered a promising environment for growth, but their outlook reflected a belief that oil prices would remain stablilised at around their current level and the U.S. economy would experience a soft-landing from its current slowdown.

The Association also highlighted the Energy Cost Crisis, with average 24% price in electricity and gas in the past year as unsustainable and stated that unless it was addressed it would damage manufacturing exporters. Irish inflation, heading back up towards 4%, was also identified as a potential problem.