SFA predicts 'record' redundancies in 2003

 

The Irish economy is facing a record year of redundancies in 2003, according to the Small Firms Association (SFA) which today described the economic outlook as "negative".

In its autumn economic statement the SFA warned that the Government must not take the easy option of increasing taxes in the December budget "as this will do untold harm to the economy at a time when it is most vulnerable".

Mr Pat Delaney, SFA director, said that the lack of progress on insurance reform will result in many company closures. "The cost of Employers and Public liability insurance has increased by over 100 per cent in the past two years. Property insurance by 80 per cent and motor insurance by 42 per cent."

He said the speed of reform was insufficient to make any necessary impact on these costs. Mr Delaney said more than 2,060 job losses and over 80 closures associated with insurance costs had been identified by the SFA.

Dropping consumer spending is also placing pressure on businesses, Mr Delaney observed. "Consumer spending continues to weaken and is likely to grow by just 2.2 per cent this year, compared to over 9 per cent in 2001."

The SFA predicts inflation will ease by year end but will remain above the EU average due tohigh insurance, wages, health and education costs.