The Small Firms Association says it is time for the Irish economy to stop 'sleepwalking'. Addressing the association's annual conference today, Chairman Kieran Crowley said that Irish business and Irish workers must come to terms with the harsh reality that the world does not owe us a living.
'We have to go out and earn it in a much more competitive environment than before,' he told over 250 delegates at the conference.
'During the boom years we believed our economy was indestructible and that the world owed us a living. We believed that we could pay ourselves more than anyone else simply by increasing our prices and that no one would notice. We awarded ourselves wage increases three times those of our international competitors,' Crowley said.
'We have presided over an inflation rate more than twice the European average. We were unquestioned over the significant growth in public spending, falling exchequer receipts, infrastructural problems in public transport, telecommunications, waste management and public utilities,' he added.
He said off these combined to make Ireland a less attractive and more expensive place to do business. He also pointed to the problems of housing costs, traffic congestion and poor infrastructure.
He said that suddenly being competitive is important again. 'If the euro continues to strengthen and wage costs continue to outstrip productivity growth the short term outlook for sustaining current employment levels is very uncertain,' he warned.
The SFA Chairman cautioned that employment growth would slow considerably in 2003. Demand for new employees among small firms will be just 2.7% - that is down from 6.5% in 2002, 7.8% in 2001 and 10.9% in 2000.
'The ability of the small business sector to create jobs is back at 1995 levels and current employment levels are under threat because of unsustainable increases in business costs,' he said.
Crowley also expressed concern over Irish price levels. Calling on the Government to detail its anti-inflation policy, he said there was a major problem in the service sector, with inflation there running averaging 8%.
