The last 12 months have continued to prove a difficult environment for SMEs, according to small business lobby group ISME in its end of year statement.
ISME said Ireland's economic slowdown has continued, as international demand here remains weak and with the rise of the euro against the dollar. It said demand for Irish exports dropped as the value of the euro soared against the US dollar (19% since January 1st 2003), and sterling (8%).
Within the Irish economy itself small business has had to contend with a number of factors that have curtailed growth, it said. Production costs continued to increase, including insurance, labour, raw materials, commercial rates, transport and energy.
ISME's latest Quarterly Survey of SMEs recorded a reduction in numbers employed with small business employing a net 3% less than in the same period last year.
ISME's 2003 Wages and Conditions of Employment Survey established that wages in SMEs' increased by an average of 6.2%. While this is a moderation on previous years' increases, it is still over twice the European average and well over the annual rate of inflation.
Ireland's high rate of inflation played a key role in undermining the country's economy well into 2003 ISME said, and, despite the reduction in recent months, is still a danger to the economy's competitiveness.
'Stealth taxation led to a series of price increases in VAT, motor taxation, energy costs, postal costs, transport, commercial rates, education and health services. This fuelled a high cost environment and in turn increased wage demands,' the statement said.
