There has been a marked deterioration in the outlook for the manufacturing sector over the coming months, a major survey of industry leaders conducted on behalf of Ibec concludes.
Energy costs followed by supply chain issues and labour shortages were identified as the main challenges facing the industry.
The proportion of survey respondents opting for a ‘very good’ or ‘good’ rating on their overall assessment of the manufacturing environment fell from close to 90% last year to 53% in this survey.
Just over half were positive about the external environment while around two thirds were optimistic for their own business’s prospects.
Overall optimism around profitability was held in check by caution around rising costs and supply chain instability.
“Having successfully emerged from the pandemic, our manufacturing businesses now face into the energy cost crisis, the highest inflation in many years, and continued supply chain issues, all playing out against the backdrop of war in Ukraine,” Sharon Higgins, Executive Director of Membership and Sectors at Ibec, said.
“They also have to deal with the more constant challenges – climate change, changes to the global tax regime and Brexit,” she added.
The state exported a record €165.2 billion of goods in 2021, emphasising the importance of the manufacturing sector to the overall economy.
260,000 people are employed in the sector, accounting for over 12% of total employment.
“The sector is responsible for €12.5 billion in wages and employment taxes annually, generating around €1.7 billion of tangible investment annually, over €4.4 billion of corporation tax, with manufacturing companies spending around €20 billion spent each year on goods and services from suppliers in the Irish economy,” Ibec said in its report.