Indigenous firms being crowded out by data centres as not enough land is being zoned for enterprise

Massive surge in economic activity is not being accommodated by zoning of new lands for enterprise and employment

Sarah Collins

Not enough land is being zoned for Irish logistics and warehousing, worsening a supply crunch and pushing up prices, a report has found.

Data centres and foreign multinationals are crowding out indigenous industrial firms, particularly in south Dublin, consultants Octavian Economics said in a report out today.

Despite massive population growth and record high exports, imports and jobs, there has been no growth in land zoned for “enterprise and employment” by local authorities.

In fact, there has been a “persistent underestimation of need in the area of industrial and logistics” land by local authorities, the report said, at a time when Brexit, Covid and climate change are changing consumers’ and traders’ behaviour.

Priority areas for development include South County Dublin, Fingal, Louth and Cork.

“The pandemic showed what happens when massive cash injections by Government crash into supply bottlenecks: Inflation is the result you get,” said Marc Coleman, founder of Octavian Economics.

“With a third of a million more people since 2017, an economy that’s 70pc bigger and a rise in trade volumes equivalent to the preceding 40 years, a massive surge in economic activity is happening that is not being accommodated by zoning of new lands for enterprise and employment.”

The population has grown by 361,671 since 2016, according to the census, twice the rate of the previous five years.

Employment is now at a record 2.5 million people.

Goods exports amounted to more than €165bn last year, CSO figures show – a new high.

“Unlike our EU peers, Ireland’s superlative growth – the expansion by over two-thirds in the size of its economy since 2016 – poses a significant risk that even if it abates elsewhere, inflation in Ireland may persist or gather momentum,” the report says.

“The recent injection by Budget 2023 of an additional €11bn, while very welcome, adds to the concern that rising demand will place an intolerable strain on logistics unless action is taken.”

The report points to increasing bankruptcies in the transport and storage sector in the EU.

This, it said, could be “a leading indicator of more intense pressure to come as recessionary risks rise in the wake of subsequent interest rate rises”.

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