SFA warns that job creation is declining rapidly

Ireland's Small Firms Association (SFA) Employment Survey has revealed that job creation is continuing to decline rapidly.

The reports main findings showed a 21 per cent decline in demand for labour and a 31 per cent drop in the number of companies with vacancies. The survey projected new jobs down from 45,942 to 36,238, a halving in the availability of part-time work, and found that 42 per cent of companies cited unrealistic salary expectations as a reason for not creating jobs.

Mr Delaney said that the 8th Annual SFA Employment Survey showed that under current conditions the ability of the Irish economy to create new jobs is declining rapidly: “For the third successive year small companies created less new jobs than the previous year. While they will create 36,238 new jobs in 2002 the corresponding figure in 2001 was 45,942 and 64,201 in 2000. The survey shows that the labour market is now less rigid but those companies who are prepared to create jobs are being hindered by lack of skills and unrealistic wage expectations. If we do not increase our skill levels and moderate our wage expectations we are writing our own epitaph.”

The 8th National Employment Survey by the Small Firms Association was carried out in the first quarter of 2002 and 1014 (29 per cent) companies responded.

The questionnaire was distributed to a sample 3,500 of the SFA‘s 8,000 member companies. The sample was drawn from manufacturing, distribution, retail and services sectors and from a regionally representative sample, with all parts of the Irish Republic included in the sample.

The main factor causing this reduction in demand for labour are unrealistic salary expectations with 42 per cent of companies citing this as the main reason for not recruiting.

While the mindset of small business remains reasonably upbeat the overall picture is far less positive than 12 months ago.

There has been a dramatic decline in the number of companies seeking to recruit with just 43 per cent of respondents having vacancies, down from 63 per cent in 2001.

Demand for new employees is expected to decline by 21 per cent this year. The sector will create a further 36,238 new jobs this year, down from 45,942 in 2001, 64,200 in 2000 and 83,000 in 1999.

(SP)