People Focus Spring 04 NA - CIPD

PayNew National Dealis unlikelyThe prospects of unions and employers reachinga deal on the pay terms of the second-half ofSustaining Progress in the next few months aregetting higher, but the odds for another nationaldeal to follow are getting equally shorter.With inflation now falling to 2%, employers are in agood position to hold out for a deal below the 7%conceded in the first 18 months of SP or around4% per year.While the economy is undoubtedly struggling outof the dip it has been in for the last couple ofyears, jobs are still being lost at a rate not seensince the 1980s - almost 28,000 last year andFAS predicts an increase in the averageunemployment rate.Though most predictions are for a solid yearahead economists are warning us that we willnever again hit the double-digit growth of themid-1990s. No more deals then ahead ofinflation or almost double that of ourneighbours. We will still have to work hard tomaintain growth levels on a par with our EUneighbours.Employers have already pointed out that wehave fallen seven places to 30th in the WorldEconomic Forum’s Growth Competitive Index.Last year, according to IBEC, of the 26,000 newjobs created between January and September,20,000 were in the public sector. Productivityneeds to be lifted across all sectors, it said, andmore investment in infrastructure is required.The Small Firms Association said that wagemoderation is urgently required now and wecannot sustain wage increases over twice theEurozone average. While the SFA admitted thatwage increases in Ireland have moderated inthe last couple of years - down from 9% in2001 to 6% in 2002 and 5% in 2003 - itwarned that we need to continue thatdownward thrust in order to compete effectivelypg5 Autumn 2004