Employment levels in the State will continue to rise despite inevitable job cuts in the construction sector, as immigration moderates, according to the national employment authority. Caroline Maddenreports.
In its quarterly labour market commentary released yesterday, Fás forecasts that 60,000 new jobs will be created this year, bringing total employment to almost 2.1 million.
While the employment growth rate is expected to slow next year, some 23,000 extra jobs are still expected.
In the first three years of EU enlargement, about 320,000 personal public service (PPS) numbers were issued to migrants from the 10 EU accession states, but Fás says that this influx is expected to ease.
"While migratory flows from central Europe remain strong, they have begun to moderate since peaking towards the end of 2006," Fás says.
The authority predicts that net migration will halve from 60,000 this year to 30,000 in 2008. If this slowdown in inward migration materialises, the average unemployment rate is expected to remain below 5 per cent next year.
"The labour market has begun to transition from a period of high employment growth to a more moderate rate of job creation," according to Fás economist Brian McCormick.
"While job losses in the construction sector seem inevitable as housing output declines, an increasing emphasis on housing quality will soften the negative impact on employment," Mr McCormick says.
For example, the trend among homeowners towards extending their houses in favour of upgrading to a larger property has created additional work for builders.
Nevertheless, employment in the construction sector is expected to fall by 15,000 over the next 18 months as the level of housing output falls.
However, the demand for services staff remains strong and the majority of new jobs growth this year and in 2008 will occur in this sector.
The employment authority also reports that earnings growth in most sectors "just about kept pace" with inflation in the second quarter, with the result that there was no real increase in wages.
