Ireland will fail to take advantage of a positive economic outlook unless "unsustainable" increases in production costs are addressed, business leaders insist.
In separate year-end statement, IBEC, the Small Firms' Association and the Irish Small and Medium Enterprises Association (ISME) all called for measures to contain costs.
"Ireland has achieved much over the past year and looks forward to economic growth of 4.5 per cent in 2005," said IBEC director general Mr Turlough O'Sullivan, noting that this was twice the rate anticipated for the rest of the euro zone and well ahead of those forecast for Britain and the US.
However, he added: "We will only be able to achieve this in 2005 and into the future if we make the necessary changes in order to be able to compete more effectively on the world stage."
He said international competition was forcing down prices for manufacturers at a time when non-pay costs had increased by 14 per cent in two years. "This is unsustainable," he said.
ISME maintains that smaller business has experienced a 30 per cent increase in costs in the last three years - almost three times the rate of inflation in the period.
It says members are most concerned about labour costs, which have risen at twice the European average and the rate of inflation in 2004, according to chief executive Mr Mark Fielding.
"Wage moderation is now a prerequisite for sustaining and developing future economic activity," he said. "It is imperative that, at the very least, labour cost increases are brought into line with the EU average in 2005 to ensure that our competitiveness is not completely eroded."
Despite the rising costs, ISME says that 2004 saw a net increase in job creation among small and medium-sized businesses, compared to losses in 2003. However, the Small Firms Association (SFA) sees 2005 as a challenging year for employment, especially in manufacturing.
SFA director Mr Pat Delaney said "regaining lost competitiveness" was the key business policy for 2005. "This requires significant improvement in the 'value for money' proposition of public services and local authorities," he said.
"Spending more money on public services is not a panacea for solving the problems," he said. "What is required is the focused delivery of public services based on quality, necessity and value for money."
The SFA has called for any future increases in commercial rates to be tied to agreed performance targets.
IBEC is seeking a greater sense of urgency from the State and its agencies "so that we can speed up the building of roads and other critical infrastructure including waste incinerators".
Mr O'Sullivan also warned that there was evidence of serious waste and inefficiency in the public service.
"Increasing costs and waste and inefficiency in the public service undermine our ability to be competitive in the global market place," said Mr O'Sullivan. "We must address these issues decisively in 2005."
