NCC Releases Report On Costs Of Doing Business In Ireland

by Jason Gorringe, Tax-News.com, London

30 October 2006

Ireland's National Competitiveness Council (NCC) on Thursday released a new publication, entitled 'Statement on the Costs of Doing Business in Ireland'.

The report outlines the key findings of research that assesses the costs of doing business at four locations in Ireland (Cork, Galway, Limerick, and Dublin). The research compares these Irish locations to a range of international competitors (Bangalore, Boston, Budapest, Copenhagen, London, Maastricht, Manchester, and Singapore) across a range of sectors.

The results show that Irish cities are cost competitive when compared to other high income cities in the EU15 and US, due to Ireland’s broadly competitive labour costs, international transportation costs, and taxes on labour and profits.

However, all EU15 and US locations assessed in the report are significantly more expensive than Singapore, Bangalore, and Budapest.

The costs of utilities, property, and key services (e.g. IT services, accountancy and legal fees) are relatively high in Ireland. However, the report shows that Cork, Limerick, and Galway have strong cost advantages over Dublin in many sectors, indicating further potential for regional development.

Launching the Statement, Chair of the NCC, Dr. Don Thornhill observed that:

“While higher costs are to be expected in wealthier countries, it is essential that the cost base supports the competitiveness of our exporting sectors. Despite general perceptions, Ireland remains competitive compared with other locations in Europe and the US. We are concerned however, that the costs of property, especially in Dublin, utilities, in particular electricity, waste and water, and key services are damaging the competitiveness of some Irish firms.”

Key findings in the report were that:

• Labour costs (59%) dominate business costs in Ireland followed by property (11%), utilities (nine percent) and transport costs (four percent). All other costs account for 17% of total costs.
• Labour costs, taxes and international transport costs are competitive when compared with benchmarked locations in EU15/ US countries.
• Business input costs that weaken Ireland’s overall cost competitiveness include property costs, utility costs (especially electricity, waste disposal and water), mobile telephone calls and key services (e.g. IT services, accountancy and legal fees).

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