Labour demand remains strong as the percentage of employers reporting vacancies continues to increase.
The economy has experienced considerable employment growth over the past year. The latest Central Statistics Office Quarterly National Household Survey (QNHS) for the third quarter of this year reports an annual increase of over 96,000 in the numbers employed.
In absolute terms, this is the highest year-on-year increase recorded in over five years. The seasonally adjusted rate of unemployment at 4.3 per cent is the lowest in Europe.
Despite employment growth of over 5 per cent in the last two quarters and record labour force growth due to increased female participation, immigration and demographic factors, the percentage of firms with vacancies continued to increase.
The FÁS/ESRI Employment and Vacancies Survey indicates, excluding two monthly fluctuations, the percentage of firms reporting vacancies has been increasing throughout the year.
Data for November 2005 shows 19 per cent of firms across all sectors trying to fill vacancies. This compares with a figure of 6 per cent in January 2005.
The vacancy frequently cited across all sectors as difficult to fill is of the managerial grade. The latest Bank of Ireland jobs index, which tallies the number of recruitment advertisements in national newspapers, provides further evidence of a strengthening in labour demand.
There were almost 199,000 advertisements placed from January to November of this year. This represents a 2 per cent increase on last year's figures and a 10 per cent increase on 2003.
The economy-wide increase in the percentage of firms reporting vacancies has been predominantly driven by the services sector, which accounts for two out of three jobs in the economy.
In the first three quarters of this year, over 70,000 jobs have been created in the sector and the latest survey data indicates that labour demand is still strong.
Since the beginning of the year, the percentage of service sector firms reporting vacancies has increased by a significant 21 percentage points - from 6 per cent in January 2005 to 27 per cent in November 2005. Of the service sector firms reporting vacancies, 80 per cent describe their vacancies as "difficult to fill". The positions most frequently cited by service-sector employers as difficult to fill included managers and accountants.
The percentage of construction employers with vacancies was stable during the year, averaging around 15 per cent. With the creation of over 22,000 jobs, labour demand in the sector was strong in the first, second and third quarter of this year.
According to the latest FÁS Quarterly Labour Market Commentary, the number of apprentice starts from the third quarter of 2004 to the third quarter of this year was up 9 per cent on last year.
On average, 94 per cent of construction firms with vacancies during the year experienced difficulty filling those vacancies. Quantity surveyors and site managers were people employers found difficult to recruit.
Industry Sector:
According to the latest QNHS, 11,000 jobs were lost in the other production industries category in the year ending in the third quarter of 2005. The decline in labour demand in the sector was reflected in the downward trend exhibited by the percentage of industry sector firms reporting vacancies, from a three-month moving average of 19 per cent in January to 15 per cent in November.
Of those industrial firms that reported vacancies in November, 56 per cent described them as difficult to fill. Employers in the industrial sector frequently experienced trouble hiring sales agents and mangers. The Bank of Ireland jobs index for November showed a decline in recruitment within the manufacturing sector.
Retail Sector:
Of all the sectors covered in the Fás/ESRI Employment and Vacancies report, the retail sector has consistently had the lowest percentage of firms with vacancies.
Managers and sales assistants were the vacancies most frequently cited by retail employers in 2005 as difficult-to-fill.
Source: FÁS/ESRI Employment and Vacancies Survey, November 2005
Nicola Doyle is an economist with the Economic and Social Research Institute. She is a co-author, with Prof Gerry Hughes, of the FÁS/ESRI Employment and Vacancies report.
