Ireland in 2010
Business in Ireland 2010 highlights key findings about the Irish Business Economy
This is the second year of the consolidated annual report on Business in Ireland. It was initiated to provide an overview of the Structural Business Statistics
currently produced by the Central Statistics Office (CSO).
The report this year puts a spotlight on small and medium enterprises (SMEs), while two new chapters were added in response to user feedback. These are:
Enterprise Births, Survivals and Deaths which looks at new enterprises over the last number of years and tracks their survival rates.
Multinationals: An Irish Perspective which introduces new data that has not been published before looking at the sectoral and geographical composition of Irish multinationals’
activities abroad. The importance of foreign multinationals’ activities in Ireland is also analysed.
Six key findings from Business in Ireland 2010
1. Key statistics on small and medium enterprises (SMEs)
SMEs accounted for almost 99.8% of active enterprises, 69.1% of persons engaged, 51.5% of turnover and 46.8% of gross value added (GVA). GVA is the gross income from operating
activities and is the balance available to enterprises to pay employees and realise a return on its investment. It is noticeable that while SMEs employed almost seven in every ten persons in the business economy, they accounted for lower proportions of turnover and GVA.
2. Impact of the downturn on SME employment
Employment in SMEs fell from 1,045,300 in 2006 to 854,500 in 2010 which was 81.8% of the 2006 level. The sector that was impacted the most was Construction where SME employment
in 2010 was only 44.9% of the 2006 level with over 115,000 job losses. Industry also suffered significantly with SME employment falling to 79.9% of the 2006 level which corresponds with over 29,000 job losses.
3. Tracking enterprise survivals – impact on employment
CSO Business Demography data monitors the number of enterprise births and deaths in the business economy. It is possible to track new enterprise births in order to gain a better understanding of the types of business that are more likely to survive the early years of their life cycle.
Between 2006 and 2009 the rate of growth in employment in enterprises that survived the first year in business slowed significantly. Enterprises born in 2006 showed an increase
in employment of 81.4% in the first year, whereas enterprises born in 2009 experienced an employment growth rate of only 26.9%. For example, for every 100 persons employed in new enterprise births in 2006 there were approximately 81 extra persons employed in these enterprises one year later.
This fall in the growth rate is evidence of the declining survival rate of enterprises and also a possible reluctance on the part of new employers to take on additional staff.
4. Business profitability in Ireland
Gross operating surplus as a percentage of turnover is a measure of profitability for an enterprise. For all enterprises in the business economy, 14.5%
of turnover was reported as operating surplus. This figure was reduced significantly to 8.9% in Irish indigenous enterprises, when the foreign multinationals were removed from the analysis.
5. Contribution of 50 largest enterprises by gross value added (GVA)
The 50 largest enterprises in the business economy were chosen based on the size of GVA generated. These enterprises accounted for 31.3% of total turnover, 40.4% of total GVA and 61.8% of total gross operating surplus.
6. Irish multinationals abroad and foreign multinationals in Ireland
In 2010, Irish multinationals employed almost 249,000 persons abroad. These foreign affiliates generated turnover of ˆ71.9 billion. By contrast, foreign multinationals employed almost 257,000 persons in affiliates in Ireland. These affiliates generated turnover of almost ˆ162.4 billion.