Growth slowing sharply, warns Forfas

Wage restraint, increased competition and improved infrastructure are needed if the level of job losses now under way and in prospect are to be minimised, the chief executive of Forfβs, Mr John Travers, said yesterday.

He said economic growth was "slowing sharply". Mr Travers was speaking at the publication of the Forfβs Annual Employment Survey 2000, which shows a record level of employment growth in State-agency client companies in 2000.

Figures contained in the survey show increasing numbers of new jobs being created each year during the past 10 years, peaking last year.

The trend now seems to be ending.

Mr Travers said the slowing of economic growth this year is being accompanied by a loss of jobs in high-tech and other sectors.

The net number of jobs created in 2000 in agency client companies was 22,908.

During the year, 44,035 new permanent full-time jobs were created, an increase of 21.1 per cent on the figure for 1999 and the highest number on record. The number of permanent full-time jobs lost during 2000 was 21,127, a decrease of 1.9 per cent on the 1999 figure.

Mr Travers said the record levels of employment growth achieved in recent years were underpinned by the fundamental competitiveness of the Irish economy, which in turn was created by the policy decisions of successive governments stretching back over two decades and more.

"There is strong evidence, however, that even before the current downturn in the economy, Ireland's competitiveness had started to slip in a number of important areas involving levels of wage increases well above productivity increases in many sectors, and higher costs imposed by infrastructural deficiencies and low levels of competition in important areas of utility provision."

He added: "At a time of major transformation in business prospects, it is essential that these trends are reversed if the level of job losses under way and in prospect are to be minimised."

The Forfβs report shows that foreign-owned client companies accounted for 70.7 per cent of new employment growth in 2000. Employment grew by 11 per cent in foreign-owned companies in 2000 and 4.6 per cent in Irish-owned companies.

Two sectors, internationally traded services, and metals and engineering (including electronics) accounted for 91 per cent of the change in permanent full-time employment.

All regions recorded positive net change in permanent full-time employment apart from the midlands (-1.8 per cent).

The south- west recorded a positive change of 14 per cent, while the Dublin region had an increase of 11.5 per cent.

The Dublin region accounted for 46.7 per cent of all net new jobs created.

The share of total employment in agency-assisted companies accounted for by part-time, temporary and short-term contract employment grew by 2.5 per cent in Irish-owned firms in 2000, but fell by 3.9 per cent in foreign-owned firms. The latter figure "could be due to temporary employees being made permanent in response to the tightening labour market", according to the report.

Permanent full-time employment in manufacturing has risen by 24.7 per cent since 1991, compared to significant falls in a number of leading industrialised nations.