The Republic will continue to be an "attractive destination" for immigrant workers this year as employment levels continue to grow, Fás has forecast.
The State training and employment authority said it was in part thanks to high levels of immigration that severe labour supply shortages have been avoided.
In a first-quarter labour market commentary, it predicted that jobs growth this year would not quite match the performance of 2005, when employment grew at its fastest rates since 1999.
Nevertheless, it anticipated another "strong employment performance" this year.
"Specifically, we are forecasting employment to grow by 3 per cent this year, with the services sector continuing to be the main provider of additional jobs," the commentary said.
A 3 per cent rise in employment would involve a net increase in jobs of 59,000, taking the number of people in work to more than two million for the first time. A small increase in the number of people out of work, from 4,000 to 93,000, is also forecast, although the unemployment rate should remain at 4.4 per cent, the lowest in the EU.
The commentary, written by Fás economist Brian McCormick, said the rapid growth in jobs last year was driven by two labour-intensive sectors, namely services (up 70,800) and construction (up 25,800).
However, there was a "noticeable deceleration" in employment growth in the construction sector in the second half of the year. "Overall, current indicators suggest that labour demand remains strong and recently there has been an increase in the number of difficult-to-fill vacancies being reported," Mr McCormick wrote.
"However, severe shortages have not emerged, largely thanks to increases in immigration and female participation (particularly among married women)."
Immigration accounted for half of the overall increase of 92,200 - or 4.7 per cent - in the labour force last year, the commentary added. Most of these migrant workers came from the new EU member states.
This has given rise to media attention in recent months about the issue of "displacement", focusing in particular on whether Irish workers are being displaced from their jobs by non-Irish nationals, said Mr McCormick.
"The strong employment growth and low unemployment rate for Irish nationals over the last year would not seem to provide any prima facie evidence that displacement is widespread," he said. "However, a detailed analysis would be required to establish a more accurate estimate of any displacement if it is occurring."
Fás is now undertaking such an analysis for Minister for Enterprise, Trade and Employment Micheál Martin.
Looking ahead, Mr McCormick said that while the rate of employment growth was likely to moderate, a "productivity rebound" could be expected as workers recruited last year became more accustomed to their jobs.
"With further employment growth forecast, Ireland will remain an attractive destination for migration in 2006 vis-a-vis the rest of the EU," the review predicted.
However, it added, migration flows were likely to be lower than in 2005 because of the ongoing slowdown in jobs growth in the construction sector.
