Senior managers in foreign multinationals are increasingly pessimistic about the economy's competitiveness, recent research has shown. The Survey of Multinational Corporations in Ireland, presented to conference delegates yesterday, shows that worries about staff availability and the resulting rise in labour costs have caused a "real and discernible fall in manager's confidence". It adds that firms are also worried about the impact of EU social legislation.

"High EU social costs that have made Germany and France uncompetitive are creeping in here as well," was a typical comment from respondents, according to the authors. The survey says employment is expected to rise over the coming year in 45 per cent of the firms questioned, with 11.5 per cent of firms intending to reduce staff. A worrying finding is that 40 per cent of textiles and food companies plan to cut their workforce.

The survey, compiled by IMI, involved replies from 87 multinationals employing 35,900 people, representing 28 per cent of all multinational employment.

Turnover in participating firms last year exceeded £8.5 billion, equal to 15 per cent of Ireland's GDP. Turnover among the firms questioned was forecast to rise by 8.8 per cent this year, compared to an increase of 9.2 per cent last year.

Electronics and healthcare firms were the most optimistic about turnover, expecting it to rise by 12 per cent.

However, 15 per cent of all firms expected zero or minus growth in turnover, compared to 9 per cent in the 1998 survey.

In terms of perception, respondents saw labour availability and flexibility as the most important determinants of competitiveness.