The Main Sectors in the Irish Economy (Leaving Cert Business): Revision Notes

The Main Sectors in the Irish Economy

Sectors in the Economy

The Irish Economy has three sectors:

1. Primary
2. Secondary
3. Tertiary

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4. Primary: The primary sector involves extracting and harvesting natural resources. It includes agriculture, forestry, fishing, and mining. This sector provides raw materials for other economic activities.
5. Secondary: The secondary sector focuses on manufacturing and industrial processes. It transforms raw materials from the primary sector into finished goods. Activities include construction and various forms of manufacturing.
6. Tertiary: The tertiary sector provides services rather than goods. It includes retail, transportation, financial services, healthcare, education, and tourism. This sector supports the primary and secondary sectors and directly serves consumers.

Primary Sector

The Primary Sector provides 5% of jobs in Ireland.

• Importance to Ireland: The primary sector provides essential raw materials, supports rural communities, contributes to food security, and boosts exports. Ireland has a rich farming history, deeply rooted in its culture and economy.
• Trends: Growth in veganism is leading to lower beef demand. Increased dairy output is occurring due to the EU milk quota being lifted in 2015, allowing for expanded production.
• Challenges: The sector faces reliance on Common Agricultural Policy (CAP) payments. Falling UK demand due to Brexit is also a significant concern, as 50% of Ireland's beef exports traditionally go to the UK.

Secondary Sector

The Secondary Sector provides 19% of jobs in Ireland. Pharmaceuticals and Computer Chips are produced by companies such as Pfizer and Intel respectively.

• Importance to Ireland: The secondary sector transforms raw materials into finished goods, adding significant value to the economy. It includes construction and manufacturing, providing jobs and supporting economic growth.
• Trends: Companies like Intel are setting up factories in Ireland, attracted by low barriers to entry and favourable tax policies. Additionally, there is a growth in automation, increasing efficiency and productivity in various industries.
• Challenges: The sector faces labour shortages due to an increase in construction jobs, partly caused by the housing crisis. This can impact project timelines and increase costs for businesses in the manufacturing and construction industries.

Tertiary Sector

The Tertiary Sector provides 75% of jobs in Ireland. It includes areas like tourism, banking and hospitality. It is the most important sector in the Irish Economy.

• Importance to Ireland: The tertiary sector provides services rather than goods, supporting both the primary and secondary sectors. It includes retail, transportation, financial services, healthcare, education, and tourism, making it crucial for economic stability and growth.
• Trends: There is significant growth in online retail, with companies like Amazon competing in the market. This trend is reshaping the retail landscape and influencing consumer behaviour, causing high street retailers to struggle as a result.
• Challenges: The sector faces rising wage costs due to increases in the minimum wage, which is particularly hurting the hospitality industry. This can impact profitability and lead to higher prices for consumers.