The Small Firms Association (SFA) has called on the Government to ensure that the Irish business environment remains competitive, in particular for small, indigenous companies.
In the group's summer economic statement, director Patricia Callan says while the general outlook for the Irish economy remains reasonably favourable, a renewed focus should be given by the new Government to restoring business competitiveness.
"The changing economic environment brings Ireland's competitive position into sharper focus, and makes a compelling case for spending growth to be limited to revenue growth, wage moderation, major changes in the costs of providing local authority services such as water, waste, environment and delivery of the long-overdue benefits of the liberalised energy market."
Ms Callan also calls on the Government to strongly commit to controlling public spending, to reforming local authority financing and to continue with existing economic and tax policies which promote enterprise development.
These issues, she says, are of a particular concern to small companies, which, as well as being the backbone of the economy, are struggling under an excessive burden of rising fuel and wage costs, increasing local authority charges and a shortage of suitably qualified staff.
In particular, Ms Callan warns that December's budget must not hail a return to highly expansionary budgeting that would undermine business investment, employment and economic growth.
According to research carried out by the SFA, inflation is the second-most cited problem facing small businesses, with 77 per cent of those questioned describing it as a "major" problem and one in 10 saying it is the most important single issue they are currently facing.
Despite inflation falling back slightly to 5 per cent in May, many companies are still struggling as they are afraid to pass the large cost increases on to their customers for fear of losing business.
"Tackling inflation must be the new Government's number one priority as it is damaging to individuals, to businesses and to the economy generally," Ms Callan says.
She has also called on the Government to ensure that any further wage growth is met with corresponding increases in productivity.
"We must be wary into the future of acceding to an overpriced labour market, which will undermine the ability of the manufacturing and tourism sectors to compete, and will create further difficulties for the construction sector to delivery major infrastructural projects on time and within budget," she says.
Unless something is done to tackle all these issues, Ms Callan fears that Ireland will be faced with many more announcements of job losses, not only in the indigenous small-business sector, but also in the multinational sector.
The Small Firms Association represents more than 8,000 small businesses and enterprises throughout Ireland.
