ISME, the Irish Small and Medium Enterprises Association, has warned that our competitiveness is decreasing steadily due to rising business costs. The association expressed concern at the increases in labour, insurance, local charges and utilities, disguised in the overall inflation figure of 0.1%.
ISME points out that in December the change in the Consumer Price Index was +0.1% in the year and -0.1% in the month.
ISME Chief Executive, Mark Fielding commented: "Since labour is the most significant cost for SMEs, the relationship between consumer prices and labour costs is a major determinant of competitiveness. The current actual wage increases and left-wing demands for further increases will create a vicious circle of price increases and wage demands, leading to reduced international cost competitiveness.
"The issue of insurance costs is a critical concern for SMEs. Our recent ISME Quarterly Trends Survey for Q4 2015 found that 75% of businesses had experienced insurance cost increases.
"Cost increases such as this are preventing them from expanding or from taking on new staff. Competitiveness will become even more of an issue if sterling values against the euro continue to decrease, as the low value of the euro has been hugely beneficial to Irish exporters. We had warned Government that these externalities could not be relied upon to preserve competitiveness but they have failed to act."