The executive council of the Small Firms Association has backed the new national partnership agreement, Towards 2016, but says the deal's pay element is 'at the very limit of what the country can afford'.
The agreement provides for a pay rise of more than 10% over 27 months. In its summer economic statement, the SFA said it was critical that productivity matched these rates of increase in order to regain competitiveness.
The body said small firms welcomed in particular the 10-year timescale for broader economic issues such as infrastructure and the environment.
The SFA said the latest inflation rate of 3.9% was bad news for the economy, and called for a cap on Government revenues from excise duties on oil. It added that competitive pressures and an increasing cost base were the main reasons behind the high level of redundancies in the manufacturing sector.
