All this weighs heavily on Irish households. As a result, there is growing concern that Ireland’s workforce will shrink as it did in the late 1980s, when many Irish left the country to find work abroad. The Economic and Social Research Institute, a Dublin-based think tank, says some 60,000 Irish emigrated in 2010, and another 40,000 will leave this year. The new government, under center-right Fine Gael Prime Minister Enda Kenny, pledged in March to get 70,000 people off unemployment benefits in the next 18 months through education and jobs-subsidies programs, a move some are applauding as a welcome change. “The previous government was preoccupied with the problems of public finance and the banking sector,” says IBEC’s O’Brien. “It didn’t focus on what was happening in the real economy, and taking measures to get people back to work.”
But even with the government’s avowed focus on the “real” economy, “there’s still a lot of uncertainty,” says Dermot Mulvihill, group finance director of the Kingspan Group, a $1.7 billion Irish building-materials company that is among the ISEQ 20. “There’s a lack of financing for businesses and individuals and a very big stock of unsold housing. We have an awful lot of things to tackle, like the budget deficit and the huge debt of the banks.” But, he adds, “[with] the fact that we have a new government now, the atmosphere has changed.”
Yet the Celtic Tiger is unlikely to roar again any time soon. Mulvihill points out that in 2005, Ireland accounted for 18% of Kingspan’s revenue, or about €200 million. Last year, revenue in Ireland was about €60 million, only about 5% of group worldwide sales. “When I’m modeling in terms of the group, with a time frame of three to five years, it looks very unlikely that much of that will come back, which is why we have moved to a geographically diversified model where 95% of our sales now come from outside of Ireland,” says the finance chief, who plans to retire later this year.
Can multinationals pick up the slack? Possibly. Quest’s Davidson says a growing number of companies like his are getting ready to go to Ireland. As far as the Irish government is concerned, the welcome wagon is fully stocked and ready to greet them.
Janet Kersnar is a London-based journalist.