Private sector jobs at risk over public sector costs: ISME

JOBS could be lost in the private sector because of spiralling public sector costs.

This is according to small business group ISME, which said the cost of running the public sector had hit “outrageous levels”, with education costs up 4.5%, utilities and local charges up 4% and health costs up 3.4%.

ISME chief executive, Mark Fielding, said: “The ongoing situation is scandalous and highlights the need to implement the recommendations of An Bord Snip immediately.

“The private sector continues to suffer as businesses are being exposed to increases in local charges and other costs, which can be directly attributed to the public sector. These are unsustainable, undermining companies’ struggle to survive and ultimately costing jobs.”

Falling food, clothes and energy prices led to the cost of living falling more than 5% in the past year, according to the Consumer Price Index (CPI) released by the Central Statistics Office (CSO).

Davy economist, Rossa White, said deflation in the retail sector was obvious in the first half of the year, with sales volumes increasing in April for the first time in five months at the expense of heavy discounting.

“Timing of summer sales is perhaps a redundant concept currently. The CPI shows that sales started in July in recent years. But, in 2009, many shops have run sales all year that they may just intensify in July,” he said.

Employers group IBEC said price falls had become widespread across most sectors of the economy.

IBEC senior economist, Fergal O’Brien, said: “Energy prices rose last month following an increase in world oil prices to over $70 per barrel, but the more recent fall in prices is likely to result in pump prices dropping again.

“Overall, we expect prices to fall further over the coming months and for the CPI to remain in negative territory into 2010. For 2009, the CPI will average close to -5%,” he said.

Prices fell 0.3% in June compared with a rise of 0.5% in June last year, according to the CSO.