More than 500 people per week have lost their jobs since the start of the year, undermining reports of positive job creation prospects, the Small Firms Association (SFA) has said.

Redundancies in the four-month period from January to April totalled 8,758, an 8 per cent increase on 2003.

Manufacturing industry has been hardest hit, with more than 3,000 redundancies since the start of the year, while around half of all jobs lost are in the Dublin region, the SFA noted.

SFA director Mr Pat Delaney warned that a spiralling cost base in areas such as labour, insurance, energy, commercial rates and service charges have all played their part in putting increased pressure on the ability of business to retain current employment levels.

Meanwhile, a new report has warned that Irish businesses are pricing themselves out of international markets when they fail to use procurement practices which can result in major cost savings.

The report, which was co-authored by Dr Constantin Gurdgiev of Trinity College Dublin, found there was a lack of urgency attached to managing overheads while businesses did not see purchasing as a tool for keeping non-payroll costs down.

A survey of 100 top Irish companies found that only a small number of firms have implemented changes in finance and outsourcing practices.

Nearly half of respondents continued to use manual processing of procurement functions while only half had a designated procurement manager. "With benchmarking and private-public partnerships imposing severe constraints on companies' ability to manage labour costs, Irish companies should be paying more attention to the non-payroll cost containment strategies," Dr Gurdgiev said.