Costs a concern for food and drink manufacturing firms
Irish food and drink makers feel “broadly positive” about current economic conditions, but the mood is slightly less positive than other industries, and likely to turn more negative in the months ahead.
That is according to Food Drink Ireland, which is part of business group Ibec.
Food Drink Ireland’s latest report found that 58% of firms in the sector rated the manufacturing environment here as good or very good, but that compares to a rating of 70% across all manufacturing sectors.
There is also a more downbeat mood when the firms are asked the outlook for the months ahead.
Among the firms’ main concerns are costs – particularly the costs of labour – but also the cost of raw materials and of transporting goods.
Food and drink manufacturers are also worried about the regulatory burden – as well as the investments they need to be making, like in sustainability and digitisation.
On the plus side, the majority of firms expect export sales to rise in the months ahead – with nearly 40% predicting domestic sales will go up too.
That led a similar percentage to anticipate a rise in profitability – which is the single most important thing for businesses this year, according to survey.
Paul Kelly, FDI Director, said that food and drink manufacturing accounts for half of direct expenditure by the entire manufacturing sector in the Irish economy (payroll, Irish materials and Irish services).
“Its extensive regional footprint means it is directly linked to the performance of the whole economy and is also at the heart of the social fabric of rural Ireland. Food and drink exports reached a record value of €17 billion in 2024,” Mr Kelly said.
“As deliberations continue on the Programme for Government, it is critical that policy can support the sector address its competitiveness challenges and harness opportunities for further growth,” he added.
FDI wants the Programme for Government to include measures to help manufacturers develop strong talent pipelines by ensuring greater industry engagement as the National Training Fund is unlocked.
It also wants energy costs to be reduced by developing a new national energy and industrial strategy as well as the introduction of e a significant annual subvention to offset system charges and the PSO levy in the short term.
It also wants companies to be protected from rising costs by introducing a PRSI rebate for exposed companies.
Article Source – Costs a concern for food and drink manufacturing firms – RTE