Fears in the early part of the year that Donald Trump’s tariffs would pose an immediate threat to foreign direct investment have proved to be misplaced. IDA Ireland, the body responsible for attracting investment, had another strong year, according to its annual results published on Thursday. It has approved support for a record 323 investments expected to create an additional 15,300 jobs.
That the scale of the project numbers is surprisingly high reflects in part the fact that many were not announced during the year as was normally the practice. With American companies under pressure from president Donald Trump to return investment back to the US, many new and expanding projects were presumably content to fly under the radar for now. Their intentions will become clear as they take on staff and grant payments are revealed, but they understandably are keen to avoid becoming an easy target to a publicity-seeking president.
Total employment in companies supported by IDA Ireland rose by 1.5 per cent to stand at 312,400, an improvement on the 0.2 per cent increase seen in 2024. Against the backdrop of some retrenchment in the tech sector, this is encouraging, as is the strong commitment of €2 billion extra in research and development spending in 80 projects and investment in upskilling staff.
The strong announcement of project investment is notable not only because it comes against the backdrop of unpredictable US policy shifts, but also because of the well-discussed problems in the Irish housing market and the provision of infrastructure here. It suggests that investors have been persuaded by the Government and IDA Ireland that there is a new drive to address these issues. It is vital that this is delivered on by the State if the full potential of the projects agreed in 2025 is to be realised and the pipeline is to remain strong for the years ahead.
RM Block
The IDA Ireland figures are part of a wider story which is that growth in the economy overall remained stronger than anticipated. The top-line figures for Gross Domestic Product will again be of little use in judging the underlying trend, but consumer spending has held up, as has investment. Some of the investment buoyancy may be due to tax-driven intellectual property moves, leading to some caution on the issue from the Economic and Social Research Institute in its latest commentary. Employment growth has slowed.
There is a division in forecasts for 2026, with some analysts expecting a slowdown, while others believe current growth rates can more or less be sustained. All agree that US policy changes remain a concern, even if many of the threats made last year turned out to be bluster. Potential crunch points remain, including the regulation of US big tech in the EU. 2025 provided some encouragement, but more uncertainty lies ahead.
