Number of workers set to hit two million

THE number of people at work will surpass two million for the first time this year, according to a new report by the Small Firms’ Association (SFA).

The SFA's latest economic bulletin said 61,000 new jobs will be created this year, a 60% rise on the number of jobs added in 2004.

"This is a further demonstration that, given an economic environment committed to low inflation, low taxes and low interest rates, small business will respond by creating jobs and boosting economic growth," SFA director Pat Delaney said.

The SFA said the number of redundancies is also declining, with just 3% of manufacturing companies expecting to make staff redundant this year, down from 12% in 2004.

The economy will grow by 5.5% this year and will have the lowest rate of unemployment in Europe, according to the SFA.

However, Mr Delaney warned the Government not to squander the economic success in the run-up to the next general election expected in 2007 by spending taxpayers' money.

"It is imperative that the Government continue with existing economic policies and maintain a strong hold on public spending.

"There must not be a return to highly expansionary budgeting which would undermine business investment, employment and economic growth."

In terms of public spending, the SFA wants any increase in this year's budget to be met with productivity gains and value for money.

"It is vital any increases in health spending are matched by real gains to the customers who use the services. If money alone could solve the problems in our health sector the problems would have been solved long ago.

"Delivery of extra services without regard to cost, efficiency or effectiveness is not, and can never be, a winning formula to control public expenditure or deliver better public services. What is required is urgent and focussed management, not increases in spending."

The SFA also urged the Government to ensure that inflation does not climb beyond 2.5% by ensuring downward pressure on domestic costs such as energy, insurance, health, education, commercial rates and local charges.

"Our inflation rate is a key component in regaining lost competitiveness."