THE annual cost to Irish owned manufacturers of financing overdue credit payments is £79 million, according to a new study.

The expense is equal to, on average, £21,000 per firm per year, or £700 per employee, according to the study, commissioned by the Irish Small and Medium Enterprises Association (ISME).

The public sector was found to be the main offender in extending credit periods. ISME called on the Government to honour its commitment in the Programme for Government by introducing late payment legislation.

The Fianna Fail deputy leader and spokeswoman on enterprise and employment, Mrs Mary O'Rourke, speaking at the presentation of the study, said she was going to introduce a private member's bill on prompt payment when the Dail resumed in September.

The study examined the delays being faced by both manufacturing and service firms of varying sizes. It was carried out by Investech Ltd. While there was little difference between the experiences of large manufacturing and large service firms, for smaller firms there was significant difference between the two.

Typically small service firms got paid 20 days earlier than small manufacturers. Also, the cost of financing credit was 60 per cent higher for small manufacturing firms compared to small service companies.

In terms of credit taken, Ireland ranked eleventh out of seventeen countries surveyed. Average credit days in Ireland, at 59, compared to 50 days in Britain and 38 days in Germany.