REDUNDANCIES HIT the small and medium enterprise (SME) sector hard in the past three months, with 40 per cent of companies responding to an Irish Small and Medium Enterprise (ISME) survey indicating that they reduced their staff numbers in this period. Looking ahead, a fifth of surveyed companies expect to reduce their headcounts over the next 12 months.

According to ISME's latest quarterly trends survey, which attracted a response from over 400 companies, there are now almost twice as many companies laying off staff in comparison to three months ago, and job numbers are plummeting by the week.

Not surprisingly, the construction sector recorded the largest increase in job losses, with almost three quarters of businesses employing fewer people now than this time last year, up from 48 per cent in the previous quarter. And the situation is likely to worsen. Over the next 12 months, 40 per cent of construction businesses plan to shed even more jobs.

Jobs in the services sector look the safest, with 11 per cent of firms reporting a decrease in employment levels from the same period last year, and just 3 per cent expecting that they will employ fewer staff this time next year.

A slump in sales is likely to be partly responsible for decreasing employment levels, with 18 per cent of companies reporting that turnover is now less than the same period last year, and over half of companies said their sales/order books are down in comparison to last year. Moreover, over 40 per cent of respondents said it is now taking longer to get paid, with 35 per cent of companies waiting over 90 days to be paid.

Ireland's SMEs remain most concerned about economic uncertainty, with almost half of companies identifying this as their main worry. Reduced orders, at 16 per cent was identified as the next biggest concern.