Almost 90% of Dublin businesses have seen a rise in non-wage business costs over the past 12 months, according to a new survey by Dublin Chamber.
The most recent Business Outlook Survey for the first quarter of this year, reveals that 60% of such businesses identified energy prices as the main driver for this increase.
86% of Dublin businesses said they increased salaries in 2021.
53% said the average salary increase in the past 12 months was between 1-5%, while 33% said the average increase was 6% or more.
Almost one in ten firms reported an average salary increase of 11% or more over the past year.
"Over half of Dublin businesses now report that managing the cost of doing business is their top priority for 2022," said Aebhric Mc Gibney, Dublin Chamber's Director of Public and International Affairs.
"Decades of poor housing supply in Dublin have exacerbated an already tight labour market.
"Many firms face double and even triple digit increases in energy prices.
"As a result, companies are looking to implement energy saving measures, which would have been unviable a few short months ago," he said.
Mr Mc Gibney said the impact of increasing costs can be seen in the divergence between revenue and profit expectations over the next quarter.
"Over the next three months, 65% of firms expect that their company’s revenue will increase while only 46% expect profits to rise, implying a decline in margins and expanding costs.
"The increase in business costs and particularly energy prices pose a serious challenge that will need to be tackled as the year progresses," he said.
In an attempt to alleviate rising costs and accelerate towards a sustainable economy, Dublin Chamber is proposing a 'Going Green’ tax credit be adopted, modelled on the R&D tax credit, to stimulate green investment.
78% of Dublin businesses surveyed said attracting, retaining and upskilling staff was a key priority.
However, when asked how they expected their company’s staff numbers to change over the next three months, 62% had a positive outlook, expecting staff numbers to increase.
"While the employment outlook is positive, these survey results illustrate the need to continually upskill employees and address retention and recruitment challenges," Mr Mc Gibney said.
"Staffing issues are closely connected to the housing crisis.
"While employees struggle to secure affordable accommodation with reasonable commute times, recruitment and retention challenges for businesses will continue.
"These problems will in turn continue to affect Dublin’s competitiveness," he added.
