Enterprise Ireland records net employment decline

The Government’s Enterprise Ireland agency, for developing home-based exporting companies, recorded a net decline in employment for the first time in a decade last year.

Today chief executive Dan Flinter conceded it would be “unreal and dishonest” to pretend there would not be further job losses and company closures in the next 12 months.

Enterprise Ireland said companies backed by them generated 12,300 new posts in 2002, with exports moving ahead by 2%, to €11.8bn.

But at the same time, a total of 16,300 jobs were shed, leaving a net fall of 4,000.

Presenting his agency’s annual report, Mr Flinter said “2002 has been by far the most difficult year for Irish companies in the last 10 years and trading conditions in our key markets will continue to represent a serious challenge.”

He looked forward to companies creating new jobs this year but stressed that there was no way of knowing if the growth in employment would outpace redundancies.

The software industry was particularly hard hit by contracting markets, and Enterprise Ireland estimated that the erosion of competitiveness through higher wage costs and rising insurance premiums was behind up to one third of the redundancies.

About a quarter of the job losses were related to the closure of 100 companies out of the agency’s total client base of 3,000 firms.

Mr Flinter said he was encouraged by the fact that Irish companies were continuing to invest in research and development, which was the key to lasting success, and that company start-ups were poised for a 20% increase this year.

He added: “We believe that over the next two to three years the economy can be brought to a higher level of growth.”