95,000 jobs at risk due to currency changes

CLOSE to 95,000 Irish jobs are at risk as sterling declines against the euro.

Small business group, ISME said it is “no exaggeration” that this is a disaster for Irish businesses adding that the sector will go into meltdown.

“The situation now is worse than it was in the early 1990s when it was seen as a national crisis,” said a spokesman.

Companies exporting £100 worth of goods into Britain a year ago would have received €140 but today they will get just €105, according to ISME.

“We are extremely concerned about this situation. We will likely see an increase in imports from the UK which would put pressure on Irish businesses and jobs,” the spokesman said.

The massive exchange rate movement looks set to generate huge losses for companies exporting to Britain, the commercial director of Trade Credit Brokers, Celine Caulfield said.

“Many UK companies will typically pay in sterling one to two months after the goods or services were supplied, about two to three months after they were originally ordered and the price agreed. The 20% drop in sterling over the past three months will turn the normal 10% profit into a 10% loss. This is yet another challenge which Irish businesses must look to overcome.”

However, there appears to be a hint of silver lining, Ms Caulfield added.

“Encouragingly, we have found that most businesses are taking a proactive approach and are learning from the mistakes of others by applying detailed credit management controls...

“Businesses are actively taking the opportunity to credit-rate their debtors based on up to the minute financial information, with many b2b companies availing of protection in the form of credit insurance for their major customers.”