Ireland Update Q3 2015

@IDAIRELAND

www.linkedin.com/company/ida-ireland

www.youtube.com/InvestIreland

idaireland@ida.ie

01-

Why Ireland, companies are attracted to Ireland for a variety of reasons In Ireland,

Unemployment Rate is down

Labour costs down, they are below the Euro area average

Solid GDP growth

Strong FDI flows

Rising employment

Rapid expansion in manufacturing & services

Strong export growth

Cities & Clusters

EuropeEducationEase of doing Business

TaxTalentTrack Record

Connected Research

Cutting-edge Companies

Ireland is at the heart of things

Recent company announcements include Vodafone,

Johnson & Johnson, Shopify, Citi, Affero Labs, Marsh &

McLennan, eSentire, and AbbVie to name but a few.

Impact of FDI

Excellent flow of projects in the first half of 2015, 110

investments, up from 100 last year, potential to create

9,000 jobs.

Employment in IDA client companies now stands at

174,488 people, the highest level in the history of

IDA Ireland.

02-

‘We evaluated several locations within Europe to expand our business and establish an EU base to better serve our clients on both sides of the ocean. We were extremely impressed with the technical talent in Cork and the ecosystem the government has helped to develop to fill the skills gap, specifically in the demanding and competitive field of cybersecurity.’

Mark McArdle, CTO eSentire Inc

‘The new Zalando Fashion Insights Centre in Dublin will play a major role as we continue to lead online fashion and grow our presence across Europe’

Robert Gentz, Founder and Member of the Management Board, Zalando

‘We are very excited to be here in Ireland and growing in Dublin. The city is a technical hub and offers us everything we could need in terms of people and talent. It is a vibrant place and innovation is at its heart. It is the perfect place for us to grow YouPass and Megatransfert into a world class fintech company. We are excited for our future here and hiring some exceptional talent.’

Florent Thiebeaux, Founder, Megatransfert Technologies IDA Ireland clients have a significant impact on the Irish Economy;

- €124.5 bn exports

- Growing supply base - €13.9bn of purchases from Irish suppliers

- €1.4 bn R&D spend

- €8.5bn payroll

- €2.8 bn of corporation tax

Fastest growing economy in Europe

Rapid expansion in both manufacturing and services sectors. Retail sales and VAT signalling strength in domestic demand. Strong export growth.

Public finances improving rapidly, Government debt fell 13 points to 110% of GDP in 2014.

Irish economy to grow at the fastest in Europe for 2nd year in 2015.

Source: CSO National Accounts, 2014-2016 forecast from Department of Finance (April Statement 2015) 03

-

Real GDP Growth5%

4%

3%

2%

1%

0%2013 2014 2015 2016

FDI led exports sector plays an important role

High value sector was key to supporting economy through restructuring.

Almost 105,000 additional people at work since 2012. Unemployment falling, down to 9.7 % in June from peak of 15.1% in 2012.

Source: CSO, 2013

Composition of Exports 2013

28%22%12%10%

6%6%5%

0% 10% 20% 30% 40%

PHARMA & CHEMICALSCOMPUTER SERVICESBUSINESS SERVICESFINANCIAL SERVICES*MEDICAL DEVICESMACHINERY & TRANSPORTFOOD & BEVERAGE

* Miscellaneous manufacture articles (8)

Labour market continues to strengthen

Source: CSO, Q2 2014 04-

Number Employed (000’s)

No. Employed Unemployment Rate (RHS)

1,960

1,940

1,920

1,900

1,880

1,860

1,840

1,820

1,800

1,780Q1-11 Q3-11 Q1-12 Q3-12 Q1-13 Q3-13 Q1-14 Q3-14 Q1-15

16%

14%

12%

10%

8%

6%

4%

2%

0%

Significant improvement to Ireland's competitiveness

Ireland’s improved competitiveness is reflected in Global Competitiveness Reports.

- The World Bank Competitiveness Report up 3 places to 13th

- IMD World Competitiveness Yearbook relatively stable at 16th

- The World Economic Forum Global Competitiveness Report 2014/ 2015, up 4 places to 25th

Source: IMD WCY 2015, World Bank Doing Business Report 2015, WEF Global Competitiveness Report 2014/2015

05-

Ireland Global Competitiveness Rankings

1

5

10

15

20

25

302012 2013 2014 2015

RANKINGS

WEFIMDWorld Bank

Labour costs competitive

Irish hourly labour costs fell below the Euro Area in 2011 and have remained so to 2014. Irish labour costs are 10th in the EU, below countries like Luxembourg, Germany, Belgium, and the Netherlands.

Source: Eurostat 2015

Labour Costs FallingIrish hourly labour costs fell below the Euro area in 2011 and has remained below in 2013.

42.041.140.235.735.233.531.831.729.228.427.424.522.221.0

50 60 70 80 90 1000 10 20 30 40

DENMARKBELGIUMSWEDENLUXEMBOURGFRANCENETHERLANDSGERMANYAUSTRIAEURO AREAIRELANDITALYEUUKSPAIN

TOTAL LABOUR COSTS 2014

06-

42.041.140.235.735.233.531.831.729.228.427.424.522.221.0

Confidence returning to the property market

Value remains in commercial property market, particularly in regional locations.

Recent price increases, concentrated in prime Dublin city centre property - prime headline rent €538m2 / €50ft2.

Different story in suburbs

- South Suburbs €269m2 / €25ft2

- North Suburbs €161m2 / €15ft2

- West Suburbs €151m2 / €14ft2

Current factors at play in property market

- New development cycle has begun, the return of the crane

- Significant city centre stock coming on stream from Q4 2015 to 2017

Source: CBRE Ireland Bi-Monthly Research Report, July 2015

One of the most productive economies in the EU

Labour costs do not tell the whole story, productivity is also key. Irish productivity is c.35 points above the EU27 baseline.

Source: Eurostat 2014

The most productive & efficient economies in the World

0 50 150 200100

IRELANDBELGIUMFRANCESWITZERLANDSWEDENAUSTRIASPAINDENMARKNETHERLANDSEURO AREAFINLANDGERMANYUK

INDEX (EU27 = 100)

135.5127.3

116114.9114.5113.4111.2

111108.8108.6107.1

10799.4

07-

Multilingual - foreign languages spoken at home

Multicultural and multilingual society

- Over half a million Irish residents speak a foreign language fluently

- c.17% of the population is international

Only English speaking country in the Eurozone

Ideal base from which to service global markets

Source: CSO Census 2011, Foreign languages spoken at home Source: Eurostat 2015

Polish

French

Lithuanian

German

Spanish

Russian

Romanian

Italian

Chinese

Arabic

Other

Total

119,526

56,430

31,635

27,342

22,446

21,640

20,625

10,344

15,166

11,834

177,080

514,068

Foreign languages spoken in Ireland, number of people

Ireland, one of the youngest populations in Europe

Median age of 35.5 compared to 42.8 in Euro Area. One of the lowest old-age dependency ratio in Europe at just 18.6%, compared to 31.3% in Germany, and 28.9% in Euro area as a whole.

GermanySwedenEuro AreaFinlandDenmarkFranceAustriaBelgiumSpainUKSwitzerlandNetherlandsIreland

OLD DEPENDENCY RATIO 1ST VARIANT (POPULATION 65 AND OVER TO POPULATION 15 TO 64 YEARS)

15 20 25 30 35 400 5 10

31.329.928.928.927.627.526.826.826.426.325.725.518.6