Ireland remains a cost-competitive location in which to do business, although high property and utility costs are a cause for concern, according to the National Competitiveness Council.
In its Statement on the Costs of Doing Business in Ireland study which was published yesterday, the council reported that Irish cities were cost-competitive when compared to high-income cities in the US and Europe.
This was attributed to "Ireland's broadly competitive labour costs, international transportation costs and taxes on labour and profits".
However, middle-income cities such as Bangalore, Singapore and Budapest were found to be considerably more competitive in terms of business input costs.
Moreover, the study confirmed that utilities and property costs, as well as services in areas such as IT, accountancy and legal fees are "relatively high" here, as are mobile telephone call rates.
The council found that insurance and freight costs are relatively competitive. In compiling the report, it looked at Dublin, Cork, Limerick and Galway and found that the regional locations have "strong cost advantages" over the capital. Unsurprisingly Dublin was shown to be the most expensive location, particularly for services sector firms.
The study emphasised that labour costs were competitive when compared to other benchmarked locations in Europe and the US. As labour costs constitute the majority of most company's input costs, the council said the State's competitive wage level is a strong contributing factor to the "overall cost competitiveness of firms".
However, "with trade and investment increasingly flowing east, there is a greater need than ever for productivity gains to sustain further wage increases".
At the launch of the report Dr Don Thornhill said: "While higher costs are to be expected in wealthier countries, it is essential that the cost base supports the competitiveness of our exporting sectors. Despite general perceptions, Ireland remains competitive compared with other locations in Europe and the US.
"We are concerned however, that the costs of property, especially in Dublin, utilities, in particular electricity, waste and water, and key services are damaging the competitiveness of some Irish firms," Dr Thornhill added.
