‘Insurance costs and inflation’ putting jobs at risk

UP TO 700 jobs are at risk because of soaring insurance costs and pressure from inflation, the chief executive of Shannon Development warned yesterday.

Kevin Thompstone said this was the toughest economic environment in a long time and many companies were fighting for survival.

He was launching the semi-State company's 2002 annual report in Limerick, which revealed that 734 jobs were lost in the region in 2002.

"In a recent survey of our client companies, businesses in the region were saying that domestic cost pressures, particularly insurance costs and similar inflationary pressures are the major concerns of business today," he said.

"They are having an adverse effect on the competitiveness of business and must be met head on if companies are to survive, yet alone grow. Time is running out for tackling the competitive forces affecting business in Ireland."

Mr Thompstone said the report pointed out that between 600 and 700 jobs were in the at risk category in companies spread across Limerick, Clare, north Tipperary, north Kerry and south-west Offaly.

"Up to 250 of these jobs would be in the Shannon Free Zone. We are in discussions with a Shannon company about a replacement project to offset the level of job losses," he said.

However, the situation was not as bad as this time last year when between 1,500 and 1,600 jobs were at risk, said Mr Thompstone.

He expressed concern about the soaring costs of insurance in the public and private sector, domestic inflation and the appreciation of the euro which had increased the costs of exporting for companies.

He called for a "brave and quantum leap approach" to tackle infrastructural and competitive pressures. Mr Thompstone said that new airport structures announced by the Government would mark the renewal of the airport's critical role as a driver of regional economic development.

"We are confident that an independent Shannon Airport has a viable financial future and that it will successfully face the many challenges that lie ahead," said Mr Thompstone.

Meanwhile, despite operating in a very difficult economic and competitive environment in 2002, Shannon Free Zone and indigenous companies in the region created 1,393 jobs.

Job losses in these companies were 2,127 less than that recorded in 2001 when the losses amounted to 2,508. The overall loss of jobs in 2002 was 734.

Employment at Shannon Free Zone reduced by 6% to 7,373 at the end of 2002 with many companies downsizing due to the global economic downturn.