Some 86 per cent of multinational manufacturing firms operating in the Republic reported difficulties recruiting staff in the past year, according to an Irish Management Institute survey published yesterday.
The survey found labour-related factors, particularly labour availability and flexibility, continued to be the most important determinants of competitiveness.
Employment is expected to rise over the coming year in 56 per cent of firms, while 10 per cent of firms expect it to fall.
The survey found increased pessimism among chief executives with the confidence indicator falling from -16.2 in 1999 to -30.9 this year. A tightening labour market, cost increases and rising interest rates contributed to this, the report stated.
Transport, infrastructure, employment legislation and third party liability continue to be the Republic's weakest points. There are also increasing concerns over inflation and current exchange rates, according to the survey.
Adverse factors in 1999 were expected to be offset as a result of EMU. But the survey states this optimism is not nearly so evident in this year's results.
Turnover in participating firms in 1999 exceeded £18 billion. An average of 13 per cent growth in turnover is forecast over the next year.
