A sharp slowdown in employment growth in the short term is forecast in a report by F┴S, the State job promotion agency, to its board. However, F┴S will continue to encourage non-nationals to work in this State, despite the recent spate of lay-offs.
The number of unemployed is forecast by the ESRI to nearly double for the next two years, but return to around 4 per cent by 2006.
Most people being made redundant are finding new employment in indigenous companies, according to Mr Gerard O'Neill, chief executive of F┴S.
Despite the downturn, "Ireland is not facing a situation of chronic high levels of unemployment, where large numbers of unemployed persons are seen as having no hope of re-employment," states the F┴S report, seen by The Irish Times, on the effects of September 11th.
"Rather, F┴S's role should be to provide active labour market services to prevent unemployed persons becoming long-term unemployed and return them as quickly as possible to work."
The report calls for "more selective" immigration "with a concentration on professional and other higher-educated/skilled types of workers". The next Jobs Ireland Campaign will concentrate solely on vacancies requiring skilled or qualified persons.
However, early school-leavers and people with disabilities will find it harder to get into the workforce. The recent "striking" flow of women into the workforce (48 per cent over the age of 15 are working) will slow down.
According to the report, the employed must prepare for up-skilling and retraining. The pace of change is so fast that while the majority of persons who will be working in 2010 are already in the labour force, many of these have insufficient education or skills.
Employers will be less able to acquire the new skills they need through the recruitment of young people, so the need for existing employees to learn new skills will be greater than ever.
F┴S needs to work with companies, industry and organisations to encourage human resources initiatives and develop "life-long learning in Ireland", states the forecast.
The report, due to be presented to the board of F┴S next week, predicts that youth unemployment will remain low, except during the worst years of the downturn, which will peak in 2004.
Unemployment will reach a high of 7.4 per cent that year, then return to current levels by 2007. This is because of a higher proportion of young people entering third-level education, a declining number of school-leavers and lower number of young people in general.
However, early school-leavers will find it increasingly difficult to find work and employers will see them as less attractive, as industry increases its requirements in terms of skills and qualifications.
It will continue to be difficult to recruit suitable young people for the less popular trades. There will be a continued strong demand for craft skills in the long term, although in construction, there is a danger that any recession will lead to lay-offs of apprentices who cannot continue their apprenticeship. "There needs to be an effort to ensure that medium-term needs for craft workers are not damaged by short-term lay-offs."