ISME warns 100,000 jobs under threat

SMALL and medium Irish companies’ sales have fallen by an average of 15% this year putting pressure on the future of 100,000 jobs if the trend is maintained, ISME warned last night.

ISME, (Irish Small and Medium Enterprises Association) chief executive Mark Fielding said their summer business trends survey found that 44% of the association’s 3,500 member companies saw sales fall with just 29% reporting increase sales

“The most worrying aspect of the survey is that there has been a dramatic increase in the number of companies outlining that their turnover is less than at the same time last year.

“For the first time since the trends survey was reintroduced in 2001 the results of this quarter show a net reduction in turnover figures, with 44% of companies recording a smaller turnover in comparison to 29% who indicated that their turnover had increased.”

Mr Fielding said if there is no substantial improvement in our competitive position it is not beyond the realms of possibility that up to one-third of all traditional manufacturing companies will cease to exist within the next five years resulting in upwards of 100,000 jobs under threat.

“While this could be construed as sensationalism, past ISME trends surveys have proven to be correct in forecasting future business trends. The results since 2001 have provided particular cause for concern and the downward trends have not abated in that period,” he added.

ISME believe that 35,000 jobs will be lost throughout the Irish economy this year with one in three SMEs shedding jobs in the last 12 months.

The survey found that business confidence continues to deteriorate in the sector, declining for the fourth quarter running, with over one in two companies (51%) less optimistic about business confidence compared to 12 months ago.

The survey found the cost of running a business in Ireland continues to soar with 49% still experiencing wage inflation of 6% plus, 50% paying an increase in excess of 6% on rents and 50% experiencing a 6% plus increases in materials costs.

“Not surprisingly, insurance costs continue to be enemy number one with an average increase of 52% for 2003,” the survey authors said.

“When questioned on their immediate biggest concern the majority (27%) confirmed that economic uncertainty continues to be their primary concern followed by the old bugbear of insurance costs for 24% of respondents. Reduced orders (15%) and labour costs (15%) also featured strongly,” the survey’s authors said.

Mr Fielding said ISME wants the Government to set up a Culliton-type review group, comprising mainly of entrepreneurs who would have first hand experience of operating at the coal face.

“The survival of the sector depends on immediate action being introduced,” he added.