The current shortage of housing accommodation in the country has “dampened” growth for overseas firms expanding their operations here, the IDA chief executive Michael Lohan has said.
“I can’t say we’ve lost an investment on the back of housing, we haven’t,” he said, adding that housing was nonetheless a “challenge” for foreign direct investment (FDI).
Speaking on Inside Business, an Irish Times podcast, Mr Lohan said: “It’s a concern on two fronts. First of all, in terms of organic growth for companies and how they can plan for that and to make sure in terms of [staff] retention. Second, if you’re looking to attract inward talent into the country, making sure you have housing solution for them and indeed their families. So it is a constraint.”
“But we also have to recognise that this is the number one priority for Government and we are starting to see traction [on housing starts]. We need to accelerate our response. Our clients are telling us simply . . . they see growth opportunities in Ireland but we need to solve the carrying capacity and housing is one of those major issues,” he added.
Mr Lohan, who took over as IDA CEO in April, was speaking following the publication of research by EY on the attitudes of FDI investors in 44 European countries. Based on a survey of 150 FDI investors here, it found that more than two-thirds plan to increase their Irish investments in the next year.
The technology sector here has seen swathes of lay-offs in recent months, with Facebook owner Meta, Google, Stripe and Twitter among several to have slashed headcount since the start of the winter. Commenting on the sector, Mr Lohan said. “We’ve come to a point of almost balance and pause. Is there a possibility of more? There probably is but that will be based very much on how consumer demand responds.”
What are the key challenges when attracting new investment here?
In terms of the outlook for the second half of this year, Mr Lohan said there is a “very robust strong pipeline” of projects.
“The value proposition in Ireland remains strong for FDI and we’re continuing to see that come through, particularly in high-value sectors . . . like technology, life sciences, and financial services.”
Mr Lohan added that on the current trajectory he is “confident” that the agency will be able to announce a net gain in jobs for the year as a whole.
“Given the turmoil we have faced in international markets and the right sizing or correction in technology that has happened, there is still a continuation of that as we look at global markets. I do think if we see a continuation in traction [for new projects] that we’ve had for the first half of the year for the second half we will have a very strong position at the end.”
The IDA will give an update on foreign direct investment here next week. Last year, the IDA secured 242 new investments and added 24,019 net jobs among its FDI client base.
