Manufacturing leaders highlight industry challenges and opportunities

Sharon Higgins

Executive Director, Ibec

The manufacturing sector, integral to the Irish economy, employs over 275,000 people. It contributes significantly to total employment and regional development.

In Ireland, the manufacturing sector stands at a pivotal juncture, as detailed in Ibec’s enlightening 2023 Manufacturing report. The report, encapsulating the views of 39 trade associations, portrays a landscape of cautious optimism; marked by challenges but also laden with opportunities. 

Confidence ratings among manufacturers 

The year 2022 was a banner year for Irish manufacturing, with a record-breaking €208 billion in exports. This remarkable achievement highlights Ireland’s role as a crucial gateway to Europe, especially post-Brexit, bolstered by a skilled workforce, strategic location and supportive government policies. However, the sector’s journey is not without obstacles. 

The report reveals a nuanced picture of business confidence. While the current environment is seen more positively than last year, with the ‘very good and good’ rating rising from 53% to 70%, it still trails behind the 89% confidence level of 2021. This suggests a recovering but still cautious sentiment among manufacturers. Business leaders are more optimistic about the next six months, with confidence ratings improving from 39% to 66%. 

The right mix of policies, innovation and investment
can steer the sector towards a prosperous future.

Talent demands and rising costs 

Despite these promising signs, challenges like talent attraction and retention remain. With 67% of leaders concerned about this issue, the sector is countering with 72% of businesses anticipating wage increases and 32% planning workforce expansion. Housing availability, a worry for 47% of leaders, underscores the need for infrastructural development to make Ireland an attractive place for professionals. 

Rising operational costs, including raw materials, transport and energy, also pose significant challenges. The sector’s response involves embracing sustainability and digitisation, with 85% engaged in sustainability initiatives and 68% in digitisation. These strategies are pivotal not just for compliance but for operational efficiency and cost savings. 

Navigating challenges and opportunities 

The Ibec report is a call to action, urging policy refinement to meet industry needs. It underscores the need for government support in digitalisation, sustainability and R&D to enhance global competitiveness. The right mix of policies, innovation and investment can steer the sector towards a prosperous future, as it navigates the delicate balance of challenges and opportunities.