DESPITE falling costs, Ireland is still not competitive enough, according to Gerard Kilcommins, the new head of the American Chamber of Commerce.
He warned yesterday that while much has been done to improve Ireland's position as an attractive place for investment, the country could not lose sight of the fact that there were cheaper alternatives around the world.
Irish-based companies have cut annual costs by an average of 7pc in the past two years, while output has increased by about 12pc per worker.
However, Mr Kilcommins insisted that more had to be done to lower costs.
"[The cost reductions] are definitely helping to bridge the gap in competitiveness which was allowed to open up over the past decade and is to be welcomed. But much more needs to be done," he said.
"Ireland's cost base is still significantly higher than comparable locations despite recent falls in wage and price demands in the past two years.
"We need to ensure that all of those costs that are within our control are managed competitively. Wage costs for manufacturing workers in Ireland continue to exceed the OECD average and this is not sustainable."
While Ireland will never again be a "low-cost" economy, Mr Kilcommins believes the country can attract foreign direct investment as a "high-value" economy.
"We are competing for investment against countries which have effective corporation tax rates of 0pc and far lower wage costs than ours, so it is vital that we all work together to make the Irish proposition as compelling as possible," he said.
He also warned of possible reputational damage arising from the country's recent problems.
Mr Kilcommins replaces Lionel Alexander at the head of the group, which claims to represent more than 600 US firms in Ireland, employing nearly 100,000 people.