Multinationals: An Irish Perspective Business in Ireland 2016

Multinationals: An Irish Perspective

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Multinationals play an important role in the economies of many countries. Increasingly, multinationals create a physical presence in several countries around the world in order to maximise their global earnings.

This chapter presents statistics on the activities of the affiliates of Irish multinationals abroad and the contribution made by the affiliates of Foreign multinationals in Ireland. See Tables 7.1, 7.2 and 7.3 at the end of this section for more detail on the data in the graphs.

Key statistics

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Figure 7.1 Employment in Irish affiliates abroad, 2016

In terms of employment in Irish multinationals abroad by continent, Europe, Asia and America each accounted for approximately a third of the total
Employment in the remaining regions amounted to 2.5%

Figure 7.2 Irish MNEs abroad and foreign MNEs in Ireland, 2016

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‌In 2016, Irish multinationals employed over 856,000 persons in Foreign affiliates and generated Turnover of €192.6 billion
By contrast, Foreign multinationals employed just over 293,100 persons in affiliates in Ireland and generated Turnover of €345.0 billion

Irish-owned Multinationals abroad

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In 2016, Irish multinationals abroad had turnover in excess of €192bn
The US and UK affiliates accounted for 58% of all turnover

For long labels below use to display on multiple lines	Turnover
United States	37.1
United Kingdom	20.8
France	3.7
Germany	3.7
Other countries	34.6

There were over 856,000 persons employed in Irish multinationals abroad
More than one third (36%) of all employment in Irish multinationals abroad was based in the US and the UK

For long labels below use to display on multiple lines	Persons engaged
United States	23.2
United Kingdom	12.4
China	3.4
Germany	2.8
Other countries	58.2

	2016
United States	198668
United Kingdom	106126
China	29198
Germany	24213
France	23488
Spain	17815
Italy	17673
Netherlands	16552
Mexico	15606
Canada	13540

Apart from the US and UK, there were significant numbers of persons engaged in Irish owned foreign affiliates across the globe, with 29,000 employees in China and over 24,000 in Germany

	2016
United States	71.5
United Kingdom	40.1
France	7.2
Germany	7.1
Netherlands	6.4
Poland	4
Canada	3.8
Italy	3.4
Spain	3.2
Belgium	2.4

Irish owned enterprises in the US and the UK generated turnover of €71.5 billion and €40.1 billion respectively
Irish owned enterprises in France and Germany also generated a significant amount of turnover in 2016; each country reported turnover in excess of €7 billion

Services, which includes Distribution, was the dominant sector for employment in Irish affiliates abroad in 2016 accounting for 84.2% of total persons engaged
Manufacturing affiliates accounted for 15.2% of employment
Other Industrial and Construction sectors employed 0.5% and 0.1% respectively

For long labels below use to display on multiple lines	Persons engaged
Manufacturing	15.2
Other industrial	0.5
Construction	0.1
Services	84.2

Most Turnover for Irish affiliates abroad came from the Services sector (82.4%)
The Manufacturing sector accounted for a significant share of total Turnover (15.3%)

For long labels below use to display on multiple lines	Turnover
Manufacturing	15.3
Other industrial	2
Construction	0.3
Services	82.4

	Turnover
Services	46.5
Distribution	35.9
Manufacturing	15.3
Other Industrial	2
Construction	0.3

The Services sector had the largest share of turnover generated by Irish affiliates abroad at 46.5%
The Distribution sector accounted for nearly 36% of turnover, while Manufacturing accounted for over 15%
The rest of the sectoral activities combined were responsible for just over 2% of total turnover

	Services	Manufacturing
Irish	74.8	24.8
British	38.1	40.5
French	51.8	36.8
German	57.4	41.3
Italian	29.2	57.3
	0	0
EU-28	50.7	41

Figures for Irish-owned multinationals outside the EU show that the Services sector generated 74.8% of all turnover compared to 24.8% for Manufacturing
Irish, German and French owned multinationals each had over the EU average of 50.7% of their turnover from Services
Italy and Germany generated more turnover from Manufacturing than the EU average

Table 7.1 Turnover and number of persons engaged in Irish-owned foreign affiliates, 2016

Table 7.2 Turnover and number of persons engaged in Irish-owned foreign affiliates by sector, 2016

Foreign-owned Multinationals in Ireland

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The Financial and Insurance sector is excluded from this section. Accordingly, all the measures below relate to the non-financial business economy only (which encompasses the broad sectors of Industry, Services, Distribution and Construction).

	2015	2016
Number of enterprises	1.3	1.1
Persons engaged	22.2	20.3
Turnover	56.4	53.5
GVA	63.3	58.8

Foreign-owned enterprises accounted for 58.8% of total GVA and 53.5% of total Turnover in the Irish non-financial business economy in 2016
Despite such large contributions to GVA and Turnover, foreign-owned enterprises accounted for just 1.1% of the total number of enterprises in the Irish business economy
Foreign-owned enterprises accounted for one fifth (20.3%) of persons engaged in the Irish business economy
In 2016, the contribution of Foreign-owned enterprises to the Irish business economy had decreased from 63.3% in 2015 to 58.8% of GVA

	2015	2016
Number of enterprises	3.9	2.8
Persons engaged	41.7	35.8
Turnover	86	82
GVA	89.2	85.3

The Industry sector in particular was dominated by foreign-owned enterprises in 2016, with 82.0% of Turnover and 85.3% of GVA, the bulk of which came from enterprises that were owned outside the EU
There were 497 foreign owned enterprises in the Industrial sector, which represented just 2.8% of all enterprises in the Industrial sector but accounted for 35.8% of persons engaged

	2015	2016
Number of enterprises	1.8	1.7
Persons engaged	24.5	23.4
Turnover	32.8	29.8
GVA	36.4	33.4

In the Distribution sector, which includes Retail & Wholesale Trade, just 810 or 1.7% of all enterprises were foreign-owned
These foreign-owned enterprises employed nearly one quarter, 23.4%, of all persons engaged in this sector and contributed over 33% of total GVA

	2015	2016
Number of enterprises	1.3	1
Persons engaged	18.1	16.6
Turnover	43.2	47.7
GVA	38.9	36.9

Just 1.0% of all Services enterprises in Ireland were foreign owned but they employed one sixth (16.6%) of persons engaged in the sector
These foreign owned enterprises accounted for almost half (47.7%) of total Turnover and 36.9% of total GVA
EU owned services enterprises accounted for 56.9% of all foreign owned enterprises and 49.9% of employees, while 76.1% of Turnover and 70.8% of GVA came from enterprises owned outside the EU

	Gross Value Added
Ireland	58.7
Hungary	52.5
Luxembourg	47.6
Slovakia	45.8
Romania	43.9
Czech Republic	41.8
Latvia	33.5
Bulgaria	32.7
Poland	29.9
United Kingdom	29.6
Lithuania	28.2
Netherlands	28.1
Sweden	27.5
Belgium	27.1
Austria	26.9
Estonia	26.4
Slovenia	26.3
Croatia	25.3
EU28	24.5
Portugal	24
Malta	22.3
Spain	21.9
Denmark	21.5
Finland	21.1
Germany	20.1
France	16.41
Italy	15.2
Greece	13.7
Cyprus	12.8

Ireland had the highest rate in the EU28 for Gross Value Added contributions from Foreign-owned enterprises to the overall non-financial economy in 2015 (58.7% of total GVA)
This compares to the EU28 average of 24.5% for 2015
Other high-ranking countries included Hungary (52.5%), Luxembourg (47.6%) and Slovakia (45.8%) respectively

7.3 Structural business statistics by sector and nationality of ownership, 2016

Table 7.1 Turnover and number of persons engaged in Irish-owned foreign affiliates, 2016
	Turnover	Persons engaged
	€ millions	Number
United States	71,502	198,668
United Kingdom	40,095	106,126
Other countries	80,966	551,255
All countries	192,563	856,049

Table 7.2 Turnover and number of persons engaged in Irish-owned foreign affiliates by sector, 2016
	Turnover	Persons engaged
	€ millions	Number
Manufacturing	29,380	130,075
Other industrial	3,813	4,127
Construction	613	1,206
Services	158,757	720,641
All sectors	192,563	856,049

Table 7.3 Structural business statistics by sector and nationality of ownership, 2016
	Irish-owned	Foreign-owned affiliates			All enterprises
		Owned by EU multinationals	Owned by non-EU multinationals	Total
Number of enterprises
Industry¹	17,058	286	211	497	17,555
Construction	51,461	84	23	107	51,568
Distribution	45,785	522	288	810	46,595
Services (excl. Financials)	145,062	810	614	1,424	146,486
All sectors	259,366	1,702	1,136	2,838	262,204
Number of persons engaged
Industry¹	151,063	29,676	54,613	84,289	235,352
Construction	116,635	3,555	151	3,706	120,341
Distribution	272,847	57,914	25,296	83,210	356,057
Services (excl. Financials)	610,733	60,796	61,146	121,942	732,675
All sectors	1,151,278	151,941	141,206	293,147	1,444,425
Turnover (€millions)
Industry¹	40,835	30,690	155,628	186,319	227,154
Construction	18,049	1,341	38	1,379	19,428
Distribution	128,772	26,715	27,947	54,662	183,434
Services (excl. Financials)	112,368	24,527	78,064	102,591	214,959
All sectors	300,024	83,273	261,677	344,950	644,975
GVA (€millions)
Industry¹	13,525	13,590	64,625	78,215	91,740
Construction	6,486	422	14	436	6,922
Distribution	14,813	3,889	3,525	7,413	22,226
Services (excl. Financials)	43,199	7,390	17,895	25,285	68,484
All sectors	78,023	25,291	86,059	111,349	189,372
Source: CSO Structural Business surveys and Business Demography data.
¹Industry covers NACE Rev.2 (05-39) of which Manufacturing (10-33), Construction (41-43), Distribution (45-47) and Services covers NACE Rev. 2 H to N (excluding K) and R92, R93, S95, S96.

Business in Ireland 2016