ISME call for action on business costs

ISME, the Irish Small and Medium Enterprises Association, called on the new Government for a concentrated effort to reduce all business costs which are affected by government.

At the release of the CSO inflation figures for June, ISME warned that continuing increases in basic business costs are undermining efforts of SMEs to recover from the recession.

“Irish consumer price levels are some of the highest with- in the euro area, defined as high cost rising slowly. Some of the recent competitiveness improvements have been as a result of a depreciation of the euro against sterling,” said ISME CEO Mar Fielding.

“The Brexit vote has quickly eroded that advantage and the challenge is now to avoid any inflationary cost increases. In this respect it is important that pay increases are linked to productivity improvements to ensure their sustainability,” said Mr Fielding.

“Goods inflation has been consistently negative and should continue as imports from the sterling area will be cheaper,” he said.

“However, there has been a consistent rise in services inflation of more than 2.5%. The three main areas affecting business are those where there is a total lack of competition; insurance, bank interest and charges and legal fees. In these important areas government intervention has been non-existent, long on excuses; short on action,” said Mr Fielding.

There was a slight increase in the annual CPI inflation figure to 0.4 per cent, while the inflation for the month of June is 0.7 per cent.

The sub-index for Services rose by 3.2 per cent, while Goods decreased by a similar amount.