Ireland's high rate of inflation played a key role in undermining the country's economy well into 2003 and is still a danger to the economy's competitiveness, according to the ISME's quarterly survey published this morning.
Stealth taxation led to a series of price increases in VAT, motor taxation, energy costs, postal costs, transport, commercial rates, education and health services, it adds.
The result, the survey said, is a reduction in numbers employed, with small business employing a net 3 per cent less than in the same period last year, according to figures released by ISME this morning.
Significant job losses were reported in indigenous manufacturing and in distribution with only the services sector creating new jobs.
The findings are corroborated by the CSO in its latest National Quarterly Household.
However, the ISME says prospects are "relatively positive" for 2004, with an expected net gain of 5 per cent in companies expecting to employ more over the coming year. The survey also showed that wages in SMEs increased by an average of 6.2 per cent.
Although this is a moderation on previous years' increases, it is still over twice the European average and well over the annual rate of inflation, the survey said.
The ISME Survey on Insurance also found that the average SME insurance premium had increased by a cumulative 290 per cent in the last three years.