Almost 40 per cent of chief executives believe wage demands are the most significant threat to the Irish economy, according to recent research.

Labour shortages were cited by 28 per cent of respondents to the annual economic survey of chief executives by Insignia Richard Ellis Gunne.

The survey, which over the past three weeks questioned 525 of the top 1,000 companies, also found that inflation was the biggest threat only for 26 per cent of respondents.

Transport infrastructure and international stability were cited by 3 per cent and 4 per cent respectively.

However, 90 per cent believe the Irish economy will achieve a growth rate of between 4 per cent and 9 per cent in 2001. Forty per cent believe the economy will grow between 7 per cent and 9 per cent while 50 per cent believe it will grow between 4 per cent and 6 per cent. Only 6 per cent believe it will grow faster than 9 per cent with 4 per cent predicting growth between 1 per cent and 3 per cent.

Over 50 per cent say the reductions in corporation tax to 12.5 per cent will have a significant impact on the economy, with 25 per cent stating it will be very significant.

Only 1 per cent said it would have no impact while 17 per cent said it would be insignificant.

Despite market predictions of a fall in interest rates, 62 per cent felt rates would rise slightly in 2001 while 22.5 per cent believed they would remain at current levels.

Only 13 per cent believed rates would fall slightly while over 3 per cent said they would rise significantly.

The survey also found that 71 per cent believe it will be at least three years before Britain joins the euro zone, while 28 per cent say it will be between one and three years.

Some 60 per cent of chief executives felt that present levels of foreign investment would continue for between one and three years.

Almost 67 per cent say foreign investment will still come predominantly from the US. Just over 20 per cent cite the rest of Europe and 10 per cent Britain. Equities remain the top investment choice for over 50 per cent of respondents, followed by commercial property in Ireland attracting just under 20 per cent of those surveyed.

Commercial property in the UK ranks only slightly higher than bank deposits, interesting fewer than 5 per cent of respondents.