Continued gains by the euro against the US dollar are causing concerns among exporters and employers' groups, which claim the currency shift brings the Republic's competitiveness into focus.
Irish Exporters Association chief executive Mr John Whelan said yesterday the euro's strengthening in the past two months had resulted in an 8 per cent loss in competitiveness for Irish firms which exported €5.3 billion to the US in the first four months of 2002.
He said indigenous Irish companies exporting food and craft products as well as software companies had been hardest hit.
"We cannot expect a reversal to trading on the back of a weak euro," he said. "We must face up to the new reality of parity between the euro and the dollar and move to improve Irish labour and services efficiency."
He said the Government must tackle "continued hard-core inflation, which is double our trading partners rate".
"And labour costs will have to become more competitive," he added.
Employer's body IBEC echoed those concerns. Its director of economic affairs, Mr Brian Geoghegan, said a lot of Irish firms exporting to the US were set for a difficult period ahead, particularly within labour-intensive industries and the technology sector.
He said the situation could get a lot worse if sterling followed the dollar "as can sometimes happen".
"We would lose competitiveness [compared with\] the UK," he said. "We really do have to be aware of the importance of competitiveness."
A Bord Fáilte spokesman said the strength of the euro would affect US visitors to the Republic but he said that impact would be "around the margins" rather than anything significant.
He said visitors might be less inclined to make purchases once in the State and that some might opt to go elsewhere because of the currency shift.
However, he added recent movements should not be enough to cause a significant fall in the numbers of US visitors coming to the Republic.
At Waterford Crystal, a spokesman said the company was hedged against currency movements so recent developments with the euro would have no impact.
A spokeswoman for Intel said currency movements were always a question of "swings and roundabouts. These things chop and change all the time. . . it's business as usual for us," she said.
