Saturday, January 15, 2011

Chemicals, Pharmaceuticals and an Export-Led Recovery

We have seen numerous times that the Chemical and Related Products sector dominates Irish merchandise exports.  The 2010 figures to September that exports from this category make up 59% of total goods exports and have been trending upwards, if erratically, for the past few years as shown below.

Chemical Exports to September 2010

This is been particularly true for the pharmaceutical sub-category of this group where exports are up 63.3% since 2007.

Pharmaceutical Exports to September 2010 

We might have an “export-led strategy”, but what we really need to see is if this increase in exports is being transformed into increases in employment.  Getting such employment data is hard but we can use the information on the “Modern Sector” from the CSO’s Industrial Production releases to get some insight (see table 3 on page 4).

It’s not a perfect fit, and the data does not go back very far, but we can get some insight into employment patterns in this booming export sector.

Chemical Sector Employment

The sector that accounts of nearly 60% of our exports and has shown large increases over the past few years has seen employment rise by 2,300 since the start of 2008 (from 39,900 to 42,200).  These 42,200 employees generate most of our exports 60% of our exports comprise just 2.3% of the 1,851,500 people employed in Ireland. 

Even if doubling exports in this category led to a doubling employment (and it won’t) it would only put a small dent in our unemployment crisis with 299,000 people now out of work.

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