Job creation prospects 'weak'

Prospects for job creation in the State remain weak with only one in five small firms expecting to increase their employee numbers next year, according to a survey released today.

However, the number of small businesses expecting to expand is rising with some 14 per cent anticipating that they will take on new staff in the next three months, up from 5 per cent in Q2 2010.

The survey by the Small Firms Association suggests that the rate of job losses here has slowed.

Some 60 per cent of small firms anticipate no change to their staffing levels, while only 24 per cent of companies expecting staff numbers to fall in the next three months, down from 37 per cent at the same time last year.

Almost two thirds of firms (64 per cent) said they would not be implementing lay offs in the next three months and 62 per cent said they would not introduce further short time working.

However, one in 20 firms will seek compulsory redundancies.

The survey suggests businesses are keeping a tight rein on spending, with 52 per cent of the 636 respondent firms saying their pay bill will not increase in 2011. A further 23 per cent of respondents expect their pay bill to decrease.

Small Firms Association director Avine McNally said the reluctance to recruit was based mainly on economic and financial uncertainty.

"While overall the figures in regard to lay off/short time seem to be stabilising, these figures are worrying as it shows the outlook for job creation remains weak," she said.