The Irish Small & Medium Enterprises has responsed to the latest inflation figures showing an annual change of 1.7pc to the end of January.
In its response ISME outlined that cost competitiveness needs to be prioritised by the new incoming Government.
It warned that the steady rise in inflation would have a devastating affect on small businesses and had the potential to stymie any recovery if not addressed.
According to ISME, Chief Executive, Mark Fielding, “cost competitiveness remains a serious issue for SMEs as, the level of cost increases impacting on businesses have consistently eclipsed the rate of inflation.
"What is most noticeable is the inexorable rise in Government controlled costs, particularly in the areas of energy, waste, transport, utilities and local charges.”
“The small business sector does not have the price setting ability to increase revenues to compensate for state influenced costs, which undermine their competitiveness and lead to job losses and company closures.”
“It is vitally important that the dramatic increases in production costs, witnessed over the last number of years, including Government controlled costs, are brought under control or else we run the risk of continuing to price ourselves out of the market.
"The incoming Government has a key responsibility in this area and it is imperative that action is taken to control costs under their remit and to introduce incentives that will assist in increasing productivity”, concluded Fielding.