Labour costs biggest worry for small companies

At 134% of the EU average, labour costs are most significant problem for 81% of small Irish companies, according to a new survey from the Small Firms Association (SFA).

Energy and fuel prices, as well as waste, water, environmental costs were also highlighted in the report, causing concern for 76% and 69% of the sector respectively.

“This survey strengthens the position consistently put forward by the SFA that costs in Ireland are rising much more rapidly than in competitor countries,” said SFA director Pat Delaney.

“Although labour costs remain the most significant problem facing small business, non-pay costs are exerting huge pressures on the ability of small business to invest, develop, expand and create new jobs.”

The 4th Annual National Business Survey was distributed to a sample 3,500 of the SFA's 8,000 member companies, with 1,152 companies responding. The companies were drawn from manufacturing, distribution, retail and services sectors and from a regionally representative sample.

“The most telling aspect of the survey is that wage drift, skill shortages and bottlenecks in labour supply are now emerging against a background of full employment,” said Delaney.

“The move to a high cost, high wage economy must be matched by higher productivity and reductions in input costs from the sheltered sectors of the economy.

“It is imperative that the government pursue a more rigorous, efficient and equitable means of delivering Local Authority services.”