Enterprise Ireland client firms recorded 1,317 net job losses in 2004, despite increasing their net export sales by approximately €1 billion.

The agency's client companies added 11,898 jobs in 2004, to bring total employment at Enterprise Ireland firms to 142,000.

However, continued job losses, particularly in the textile and food sectors, resulted in a net job loss in 2004.

Mr Frank Ryan, chief executive of Enterprise Ireland, said that he was disappointed by the job losses but he predicted a recovery in overall employment during 2005.

"We felt it would have been a positive year for jobs but then Dairygold announced a lot of redundancies," Mr Ryan said. "But I think we will see moderate jobs growth next year at client firms."

In an end-of-year statement published yesterday, Enterprise Ireland also said that its client firms had boosted export sales by €1 billion during 2004.

Improved productivity helped firms to boost sales even though jobs were lost, according to Mr Ryan.

The agency also said yesterday that it had invested €166.9 million in start-up firms since the mid 1990s and had made €103.4 million from selling shares in these firms.

It values the existing shares within its portfolio at about €46 million.

"The State has not suffered a loss through its policy of investing in start-ups," Mr Ryan said.

"We have completed a review which shows that 76 per cent of the 476 firms that we have funded are actively trading."

These companies, the majority of which are in the technology and knowledge sectors, have achieved sales worth €1 billion and employ about 750 people.

Enterprise Ireland helped to support 65 companies focused on export growth this year, which is slightly up from the 60 firms supported during 2003, said Mr Ryan.

The pipeline for new start-ups is strong for 2005, he said.

Indigenous companies spent €240 million on research and development in 2004, which included grant aid worth €80 million supplied by Enterprise Ireland. The amount of grant aid supplied in 2003 was worth €65 million.

Mr Ryan said this was a very encouraging trend, as research and development activities were now "absolutes" in the drive by Irish companies to compete for and win international business.

He singled out a €15 million food research centre built by Glanbia as an example of Irish firms creating higher value.

One of the biggest challenges likely to be faced during 2005 was the weaker dollar, which could make Irish exports more expensive in the US.

Enterprise Ireland was encouraging Irish firms to diversify their export markets in an attempt to overcome this problem, he said.

The agency was also keeping a eye on international growth rates, as Irish companies, which tend to be export-focused, are very susceptible to falling global demand.