EMPLOYERS’ GROUP IBEC has sounded an optimistic note on job creation in the economy but has warned against the reversal of the 9 per cent VAT rate applied to the tourism and hospitality industry.
In its latest jobs report to the end of June, the organisation says that employment was up by 34,000 on the previous year with workers in the private sector increasing by 1.8 per cent on an annual basis.
According to the published research, 8,259 new jobs were announced in the past six months with over 2,100 jobs announced in September, an annual increase of 31 per cent.
The manufacturing sector provided a third of all jobs added in the first half of the year according to IBEC’s stats which say that the IT sector has been the most active component adding a total of 1,420 positions in the first two quarters.
This performance significantly exceeded expectations according to IBEC’s chief economist Fergal O’Brien who did however point out that despite the improving figures “unemployment remains at crisis level”.
IBEC strongly urged the government to resist any increase in taxes in the forthcoming budget which they said would directly hit jobs.
The government said last month that it was “examining the options” on the the special 9 per cent VAT rate for the tourism and hospitality industries but O’Brien has said that any reversal could lead to thousands of job losses:
The reduced VAT level for the hospitality sector and the introduction of a lower employer PRSI rate for low wage workers has worked. It has helped keep many businesses afloat and helped others to expand. A reversal of the 9 per cent VAT rate to 13.5 per cent would cost 10,000 jobs in the economy and undo much of the employment recovery seen in that sector over the past year.
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