Up to 35,000 jobs in small businesses are in danger as a strong euro and rising costs are denting already fragile confidence according to the latest survey of small businesses.
The summer trends survey from ISME the body representing small and medium sized businesses (SMEs) found that over half of its members are less optimistic about business prospects than a year ago.
Echoing the sentiments of the 1980's rather than the booming 90's, one quarter of companies said they expect to be employing less staff in the next 12 months with only 13 per cent indicating they will employ more. One third of SMEs have shed jobs in the last 12 months.
The serious decline in business activity does not augur well for employment prospects either. The survey found that in 48 per cent of businesses, sales/order books were below normal for the time of year with stock levels above normal for the same period.
ISME said the cost of running a business in Ireland continues to soar despite the recent fall in the consumer price index.
Half the companies said they are still experiencing wage inflation, rent rises and raw materials costs of over 6 per cent.
Not surprisingly, insurance costs continue to be enemy number one with an average increase of 52 per cent for 2003.
When questioned on their immediate biggest concern the majority (27 per cent) confirmed that economic uncertainty continues to be their primary concern followed by the old bugbear of insurance costs for 24 per cent of respondents. Reduced orders ( 15 per cent) and labour costs( 15 per cent) also featured strongly.
ISME called on the Government to work with smaller businesses to develop strategies to ensure that the sector moves forward.
According to ISME, the difficulty at present is that the vast majority of small business owners perceive Government as more of a regulator than facilitator for business, unless the company happens to be foreign owned or one of the chosen few selected for specific state assistance.