As many as 60,000 jobs could be created by small- and medium-sized businesses in 2015, but doubts over future employment levels and a potential loss of competitiveness remain a concern.
The Irish Small and Medium Enterprises Association (Isme) expects tens of thousands of jobs to be created next year as a third of businesses plan to add to their workforce.
The results of Isme’s latest quarterly business trends survey, for the final quarter of 2014, show that 30% of firms are planning to take on new workers next year, compared to just 7% that expect to cut staff numbers.
Consequently, as many as 60,000 roles could come on stream in the coming year. However, Isme chief executive Mark Fielding warned that the results indicate a slight drop-off in the number of firms planning to expand their workforce.
“The one note of caution is in the appetite and ability of SMEs to take on more staff,” said Mr Fielding. “While it is encouraging to see 30% expecting to increase staff in the coming year, another 7% expect to have to reduce staff. This net 23% is the only reduced trend in all 12 indicators. Having said that, it is possible that a net 60,000 jobs can be created in the SME sector in 2015.”
SMEs have only just begun to enjoy improved business conditions this year despite the country’s macroeconomic indicators previously detailing an emergence from recession, he added.
Eroding competitiveness could become a major hindrance to economic recovery next year with concern among businesses rising accordingly, the survey found.
The main areas of concern are the doubts some companies harbour over their ability to expand their workforce and a loss of competitiveness, both of which Mr Fielding says have the ability to slow progress in 2015.
Export is the most confident sector, according to the survey, with profitability expectations and current employment levels at their highest in years, while the retail sector appears to be struggling still.
Nine out of 10 indicators point to a negative outlook among retailers, with sales expectations cut in half, falling from 41% to 20%.
“Despite negative sentiment, retailers are investing in the future where 30% have increased investment in their business, up from 18% in the previous quarter,” Mr Fielding said.
The manufacturing sector reported increases in three-quarters of the indicators while the percentage of businesses with a positive perception of the business environment fell from 38% to 25%. Almost half of manufacturing firms surveyed expect to turn a profit next year however, up from 33% in the last quarter.
Business confidence in the services sector has dwindled, with both current and projected future levels of employment down on results of the last survey.
Isme called on the Government to assist the economic recovery by reducing government-influenced business costs below the EU average and ensuring access to credit for viable SMEs.
It also called on the Government to outsource more State sector services to the SME sector, and said that “the scourge of the ever-increasing black market activity” also needs to be tackled.
“Less loose pre-election posturing on pay increases and more hard work of social welfare and black market issues should be the Government’s New-Year resolutions,” said Mr Fielding.
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