The number in employment rose to 2,017,000 as of last May, exceeding two million for the first time in the State's history, writes Marc Coleman, Economics Editor.
Figures released yesterday by the Central Statistics Office (CSO) also show the rise in employment continues to be driven by a surge in immigrants, who now account for one in 10 people in the workforce.
The Government welcomed the figures as a vindication of its employment policies, but analysts have questioned whether the growth in jobs is sustainable.
Meanwhile, a separate survey by Chambers Ireland suggests that employment growth has remained strong in the months since May.
According to the CSO's latest Quarterly National Household Survey, 87,800 jobs were created between May 2005 and May 2006. Over the same period, the number of immigrants in Ireland rose by some 86,900, according to CSO estimates of population and migration, also published yesterday. The construction sector contributed 20,300 new jobs, of which 10,700 were filled by foreign nationals. This makes it the main driver of employment growth and the biggest employer of foreign nationals.
The next largest contributor to jobs growth is the retail sector, which created 17,500 jobs in the year to May, of which 5,100 were taken up by foreign nationals.
Foreign nationals also accounted for a significant share of employment growth in financial services and the hotel and restaurant sector, where their numbers rose by 7,000 and 7,200 respectively. The number of foreign nationals at work stands at just under 200,000, or 9.8 per cent of the workforce, according to CSO estimates.
While the number of Irish nationals working in most sectors has risen, yesterday's figures contain evidence of net displacement in both the manufacturing and hotel and restaurant sectors.
Immigrant employment in manufacturing rose by 6,900 in the 12 months to May, but the number of Irish nationals fell by 12,700. A rise of 7,200 in foreign nationals in the hotel and restaurant sector contrasted with 2,000 fewer Irish nationals. Total unemployment increased by 5,800 over the same period. Yet, at 4.3 per cent, Ireland's unemployment rate remained one of the lowest in the EU.
The Chambers Ireland 2006 Labour Force Survey - which covers developments up to August but is less representative - implies these trends have continued into the autumn. Some 59 per cent of companies had at least one vacancy to fill in the 12 months to August.
Minister for Finance Brian Cowen said yesterday: "In the last 12 months alone, employment has grown by 88,000, a job-creation rate which is three times greater than the EU average. That we as an economy are maintaining this rate of increase in employment underlines the continued strong performance of the Irish economy."
But Dermot O'Leary of Goodbody Stockbrokers said the contribution of construction to jobs growth remained excessive. "Construction accounted for 23 per cent of the total annual gains in the first half of 2006, relative to 41 per cent for the same period in 2005. Nevertheless, construction still accounted for an unsustainably high 13 per cent of total employment in the second quarter."