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News : Innovation Last Updated: Sep 15, 2014 - 10:10 AM

Ireland: Highest manufacturing productivity per person in EU thanks to US drugs firms
By Michael Hennigan, Finfacts founder and editor
Sep 12, 2014 - 12:14 PM

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Aerial view of the Pfizer Biotech Campus at Grange Castle, West Dublin

A European Commission report published Thursday shows that Ireland has the highest labour productivity per person  employed in manufacturing in the European Union (EU) thanks to US drugs firms and Richard Bruton, enterprise minister, has claimed credit  for it saying that “Improving Ireland’s competitiveness is one of the central aims of the Action Plan for Jobs."

Patrick Honohan, Central Bank governor, has said that people who misunderstand the distortions inherent in Irish productivity data are "superficial analysts."

Pharmaceuticals and medical devices account for almost 60% of Irish merchandise exports and prior to the patent cliff effect, there was a big jump in output but the number employed has remained at about 25,000 since 2004.

So with employee levels stagnant and some of the products involving little processing but passing through Ireland for tax purposes, the unit cost level has plunged.

The 2014 European Competitiveness Report 'Helping Firms Grow' confirms that manufacturing in the EU still has considerable competitive strength. It also identifies factors to enable the EU to build on this strength and promote growth. US drugs firms which dominate Irish manufacturing, helped to put Ireland among the economies with improving competitiveness.

The report says: "In pharmaceutical products - - a sector characterised by high technology intensity - - labour productivity grew more than labour compensation over the period, giving rise to negative ULC (unit labour cost) growth, on average, between 2007 and 2012."

The problem with Bruton claiming credit for an issue he has had no responsibility for is that it perpetuates a lie about real Irish productivity.

Propaganda has such a central place in his portfolio that it is difficult to know how much of it he believed to be fact.

SEE here: The idiot/ eejit's guide to distorted Irish national economic data

Ferdinando Nelli Feroci, European commissioner for industry and entrepreneurship, commented: "I appreciate the efforts made by member states to improve their industrial competitiveness. However, a lot still needs to be done. Tackling lack of investment, limited access to finance, high energy prices and inefficient public administration will put our companies and SMEs in a stronger position to compete in the global market place."

  • Member states with high and improving competitiveness: the Netherlands, Germany, Denmark and Ireland;
  • Member states with high but stagnating or declining competitiveness: Belgium, the United Kingdom, Austria, France, Italy, Luxembourg, Sweden and Finland;
  • Member states with modest but improving competitiveness: Estonia, Lithuania, Spain, Latvia, Czech Republic, Hungary, Poland, Portugal, Romania, Slovakia and Greece;
  • Member states with modest and stagnating or declining competitiveness: Slovenia, Bulgaria, Croatia, Malta and Cyprus.

Overall, the report says EU’s competitive strengths in manufacturing remain intact: highly skilled workers, high domestic content of export goods, and comparative advantages linked to complex and high-quality products. EU member states have also implemented a range of policies to increase competitiveness over the period since the start of the crisis in 2008.

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