Small businesses will create fewer than 8,000 new jobs this year, making it the worst on record for the sector, according to the Small Firms' Association (SFA).
The association said yesterday that its annual employment survey for 2007 found that the sector would create just 7,787 new jobs this year.
The number compares with the 17,350 jobs that have been lost in the Republic since the beginning of the year, which is a 10 per cent increase on 2006, the association said in its autumn economic statement yesterday.
The SFA said that those companies that were prepared to create jobs found they were hindered by lack of skills, poor responses to advertised vacancies and unrealistic wage expectations.
SFA director Patricia Callan said the survey's findings reflected the fact that there were "serious flaws in the Irish business model" that have to addressed.
"Failure to do so will result in increased redundancies and large increases in unemployment," Ms Callan warned.
Also in the statement, Ms Callan argued that it was up to the Government to create the economic conditions in which small businesses could deal with the current slowdown.
She called for a focus on restoring business competitiveness.
This, she said, could be done by limiting Government spending growth and cutting the cost of providing public services such as water, waste management and delivering the benefits of a liberalised energy market.
