'Ireland will be the first choice for companies looking for an EU base'

THE HEAD OF IDA Ireland isn’t overly concerned about a potential lack of housing for new workers if Ireland gets an influx of investment in the wake of Brexit.

Speaking at the launch of the IDA’s half-year update in which it said that investments since the start of the year will create over 9,000 jobs, the foreign investment agency’s CEO Martin Shanahan said that it is a near definite that Ireland will get more foreign investment in the wake of the UK’s vote to leave the EU.

Despite concerns about both a lack of commercial office space and residential housing, he said that the country would be able to cope with any influx of workers.

Last month John McCartney, an economist from property group Savills, told Fora that a lack of office space will likely lead to further increases in the cost of rent, which already rose by about one-fifth in 2015.

Meanwhile, the housing crisis is well documented, with recent figures suggesting that only 11,000 homes will be built across the country this year, less than half the number required to keep up with demand.

Ireland can cope

However, Shanahan said that he is “confident that we have the capacity to deal with anything that comes our way”.

“Similarities between Ireland and the UK and attributes such as being English speaking, a common law system and geographic proximity means that Ireland will be the first choice for many companies that require a base within the European Union,” he said.

IDA CEO Martin Shanahan

“There will be mobile investment out of the UK, I think that is almost certain but I would also say that the level of the mobile investment is, as yet, unknown. It is most likely to occur in two sectors, international financial services and technology.

“There has been a heightened level of activity in the last week and a half post Brexit (and) there is a lot of contact between all IDA executives and companies at this point in time.”

In terms of coping with the expected demand, Shanahan said that ”there is over two million square foot of grade A office buildings coming onstream in Dublin over the next 18 months and more in planning”.

He added: “Obviously the availability of residential housing is top of the government’s agenda and they are putting a plan in place and that will assist all parts of the economy, including investment, so I am confident that we will be able to deal with increased levels of investment.”

9,100 jobs

Shanahan was speaking at the launch of the agency’s annual report, which also coincided with its half-year update.

The IDA reported that investments approved by the organisation during the six month period “will lead to the creation of 9,100 jobs as companies roll out their plans over the coming months and years”.

It said that it won 115 projects during the year which was roughly on a par with the first half of 2015, during which 110 projects that are expected to create 9,000 jobs were approved.

Technology and business services and international financial services were amongst the strongest performers in the first half of the year, followed by life sciences.

The organisation said that while the US remains Ireland’s key source market, “growth markets including Asia-Pacific are showing increased growth over a smaller base.”

Employment at IDA client companies at the end of 2015 stood at just over 187,000, the highest level recorded during the agency’s 67 year history.

Shanahan said that the flow of investments was very strong during the first six months of 2016 and added that this is expected to continue into the second half of the year.