ISME warns rising costs threaten 20,000 jobs

Rising costs and uncertainty in global markets are putting more than 20,000 industrial sector jobs in the State at risk, according to the Irish Small and Medium Enterprises Association (ISME).

In its Spring Business Trends Survey, released this morning, ISME also notes that 50 per cent of respondents to their survey are less optimistic about business prospects than they were 12 months previously.

More than 37 per cent of businesses polled say they are employing fewer staff than a year ago while almost one in four expect to cut jobs in the next 12 months.

Inflationary pressures were identified as a serious threat to current and future competitiveness as wages, rents and raw materials costs have risen by an average of 6 per cent.

Insurance premiums have increased on average by 52 per cent this year, following a 71 per cent rise in 2002 and a 50 per cent rise in 2001. This has led to a 290 per cent cumulative increase in the last three years, according to the ISME.

"The figures from manufacturing are particularly worrying, as this sector continues to shed jobs at an alarming rate," said Mr Mark Fielding, ISME chief executive. "Based on today's evidence redundancies in the industrial sector alone could top 20,000 by year-end."

Compounding this difficulties are partial or total cancellations of orders, which 28 per cent of companies have experienced. More than half of these cancellations have come from local indigenous firms.

The level of sales/order books are below normal for 44 per cent of respondents.

The ISME report noted that exporters are under particular pressure with 37 per cent of companies confirming that their exports, in value, are less than at the same period last year. Many of the companies attribute this to a stronger euro.

The report also claims that the relatively strong performance of the multinationals in the State is masking the true difficulties of the businesses represented by ISME.