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THOUSANDS OF JOBS could be at risk due to the recent increase in minimum wage, according to the Irish Small and Medium Enterprises Association (ISME).
In its final Business Trends Survey for 2015, the organisation says there is the potential for 60,000 new jobs in Ireland if costs for businesses are curtailed.
The survey finds that current and future sales are at their highest in eight years, with owners and managers “generally positive in expectations for the new year”. Ten out of the 12 economic indicators tracked have increased.
However, the report warns that job creation will decrease due to the minimum wage increase. As of 1 January, it was upped from €8.65 to €9.15 per hour. The survey lists the euro exchange rate as “the biggest area of concern” for businesses.
Mark Fielding, CEO of ISME, noted: “Following on from a mixed-bag of results in the previous quarter it is a relief to see such a positive report coming from owner-managers this time round. The recovery might finally be trickling down to SMEs but it is important that we focus now on managing our costs and nurturing this growth.”
Fielding said that despite some improvements “SME competitiveness has taken many blows this year”.
Rents, insurance, energy and legal costs have all increased while the slack consumer demand has dictated that pricing and margins have reduced. This means that small businesses operating on increasingly tight margins cannot afford any more cost increases.
He added that, as the general election draws closer, “We are being treated to more and more outlandish political promises and policies”.
“Labour’s promises to impose a ‘living wage’ during the next administration will result in cost-conscious employers delaying and cancelling job creation which will be unaffordable if those increases are introduced.”
Living wage
Last month, Joan Burton said introducing a living wage of €11.50 per hour makes sense.
The Tánaiste said the next government should look at a €2 increase over four years – 50 cent per year.
“I don’t see any threat in the fact that people would earn a decent wage,” she stated.
The ISME survey was conducted in the third week of December, with 956 SME respondents. Some 54% of respondents employ less than ten people, while a further 36% employ between 11 and 50 people and the remaining 10% employ between 51 and 250 people. Geographically, 32% are from Dublin with 59% spread across the country, while 9% operate from multiple sites.
30,000 new jobs
The Small Firms Association (SFA) published its outlook for 2016 today. The survey found that 77% of owner-managers feel the business environment is improving, with just 4% indicating it is getting worse.
Domestic economic growth was highlighted by over 40% of businesses as their biggest opportunity in 2016. Other positive factors identified were specific sectoral opportunities (14%), exporting (12%) and bringing new products to market (10%).
Over 65% of survey respondents indicated their intention to recruit over the coming year, up slightly since the last survey in June.
This was welcomed by Patricia Callan, SFA Director: “Small firms already employ over half of the private sector workforce and almost two-thirds of our members will be hiring in 2016.
“Small firms have a crucial role to play in job creation around the country, reducing unemployment and attracting emigrants home to work. We expect small firms to create 30,000 jobs in 2016.”
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And the government is talking of heaping more taxes etc on people later in the year. They should cop on & realise you cant tax your way out of a recession. Consumers will spend less and less as the cuts go deeper.
Don’t worry people, your money and future are going to bailout out private businesses, that were mismanaged, often criminally so, and who in any normal country would have had their bondholders burnt. The irony of the a left wing party, the Shinners pointing out what is a correct thing for capitalism to do, and be backed in that by the world’s leading economists against the so called economic realists of FG and FF, whose actions are considered crazed by most of the world’s leading investors and economists. The thing is that those economists are looking at FG and FF from their own experiences, they are not aware that FG and FF will and have repeatedly driven this economy in to the mud to protect and enrich a very small no. of people that are their friends and donors. Half the population have had to lave since the foundation of the state, brought to edge of bankruptcy 4 times in 50 years, both parties are unique in the western world, having both quadrupled state debt.
Heard on the radio that we consumers are unwilling to part with our cash – cash? What cash???
and
“Michael Noonan recently urged the Irish public to get and spend” – spend what?!
It just shows how out of touch these politicians are,I barely have enough money to be able to cover my mortgage and buy groceries for the month .. ,,it really is getting to the stage where I would be better off claiming welfare..taxing the hell out of us isnt the way forward.
This grand for him is say get out and spend and on the other side Richard Bruton is planning on cutting pay to the low paid workers.
Again this government and previous one alike fail to understand that it is the low & middle income earners that spend their money in the local economy but for some reason they continue to impose higher taxes etc. onto them.
Speaking of consumer sentiment, I didn’t see The Journal cover the EU story yesterday from a Euro stat report showing that Irish people paid more for pretty much everything from alcohol, tobacco and groceries to hotels than most other EU countries. Might have something to do with consumer sentiment?
What’s new?
There is no direction out there . Until we see stability in EU we will be afraid to spend.
I spent €60 in B&Q yesterday so your welcome Mr Noonan…
I have a plan. The government should appoint one ridiculously upbeat, one nagging, and one burly Confidence Fairy! on every street.
The upbeat one will come to your door first. She will tell you how great you are, and how everything is going to turn out just fine, remind you we have close friends like Barack Obama and Queen Elizabeth rooting for us, and try to convince you to start living the high life again.
The nagging one will be next. She will tell you that you have seriously failed as a father by not going to the pub, not changing the car, not having a family holiday (in Mayo), and because you insist on your wife buying own-brand stuff in Tesco.
If these don’t get you spending again then the burly Confidence Fairy! will come to your door smelling of strong liquor. He will grab you by the scruff of the neck and drag you to the nearest ATM. He will kick you in the posterior repeatedly until you have withdrawn €1,000. He will then drag you to the pub and shout THE DRINKS ARE ON…you.
He will then drag you to every Celtic Fiasco business in your local area and kick you until you have spent all your hard earned money on vouchers for coffee shops, spas, hairdressers, dental hygienists, aromatherapy and reflexology, and on deposits for soffits, wall insulation and cobble-lock paving.
Sounds far-fetched?
Remember that pension thingy you were saving for old age?
The gov must think the people of ireland are like ATMs just put in there hands and take out what ever they want
You kind of need money to spend it in the first place, maybe that’s why people are not spending??? Just a thought!
YO NOONAYS ,SPEND SPEND SPEND EHY!!!!!!you must honestly think were gobshits DOES ANYBODY KNOW THE GREEK FOR OUR DAY IS COMMING
have your say