independent

Monday 21 April 2014

SME sector employment fell by fifth in four years

EMPLOYMENT in small and medium firms fell by almost a fifth over four years, according to one of the most detailed studies on the impact of the recession on business.

As expected, construction suffered the biggest hit, with employment in 2010 at 44.9pc of its 2006 levels.

The Business in Ireland data from the Central Statistics Office (CSO) also shows Irish businesses abroad generated turnover of €71.9bn in 2010 -- the latest year for which data was available -- compared with foreign multinationals in Ireland which brought in €162.4bn.

The report, now in its second year, put the spotlight on the SME sector and paints one of the most comprehensive pictures yet of the impact on the business environment of the economic calamity in Ireland.

Employment in the SME sector fell from 1,045,300 in 2006 to 854,500 in 2010.

There were more than 115,000 job losses in the construction sector alone.

Industry also suffered significantly, with SME employment falling to 79.9pc of the 2006 level, corresponding to just over 29,000 job cuts.

Enterprises

In 2010 there were more than 195,000 active enterprises, employing more than 1.2m people.

The services sector was the largest in terms of active businesses. Construction accounted for 20.7pc, but employed just 8pc.

Other key findings of the report include:

• Retail was the largest employer, with 212,000 people, followed by manufacturing with more than 181,000.

• Manufacturing dominated turnover within the business economy, with €96.6bn in sales in 2010.

• The majority of the enterprises in the business economy were classed as micro (with fewer than 10 people) at 90.8pc. A further 7pc were other small enterprises while 1.2pc were classified as medium-sized enterprises.

• In 2006, the number of start-ups exceeded the number of companies going bust by 4,800. But by 2009, failed companies outstripped start-ups by 10,700.

• Start-ups in 2006 recorded an employment bump of 81.4pc in their first year. By 2009, this fell to 26.9pc for new businesses.

The data also shows that all large enterprises reported profitability of 19.4pc while i ndigenous enterprises had 10.7pc.

In terms of multinationals, services was the most important sector for Irish affiliates abroad, accounting for 40.1pc of total turnover.

This was followed by distribution with 36.1pc and manufacturing with 21.5pc.

It is estimated that 3,100, or 1.9pc of the 161,200 enterprises in selected sectors of the business economy in Ireland, were foreign owned in 2010.

Irish Independent

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