Employment growth in the Republic will slow considerably this year according to the Small Firms Association (SFA).
Mr Kieran Crowley, chairman of SFA, will tell delegates at the organisation's annual conference today that job prospects in 2003 are the worst in over a decade.
Mr Crowley said there have more than 27,000 reported redundancies in the sector over the last 12 month period.
"Demand for new employees among small firms will be just 2.7 per cent, a significant downturn in relative employment creation - down from 6.5 per cent in 2002, from 7.8 per cent in 2001 and 10.9 per cent in 2000."
This decline is because the ability of the small business sector to create jobs had fallen back to 1995 levels, largely due to "unsustainable increases in business costs".
"The slowdown among small firms is not surprising given the uncertain trading climate and the significant cost increases in energy, insurance and labour costs," Mr Crowley said.
He identified ongoing high inflation in Ireland as a major concern for small businesses. Mr Crowley called on the Government to swiftly unveil its anti-inflation policy.
He also called on the Government to desist from further inflationary policy measures, adding that 1.3 per cent of the current inflation rate was directly attributable to Government measures.
"Of particular concern is that much of the inflation is being driven by Government increases in the cost of energy, health and education and housing.
"The SFA are of the view that the Government must effect price stability by setting an overall inflation target of 2 per cent and implement competition policy in the sheltered sectors," he said.