Ireland will have to continue to run fast just to stand still in holding down unemployment, writes Cliff Taylor, Economics Editor.
Perhaps the most remarkable aspect of Ireland's economic performance over the past couple of years has been the resilience of the jobs market.
The latest figures confirm that the upturn is now kicking in, with a rise of 42,800 in total employment over the past year. It is some way off the 100,000 annual rise at the peak of the boom, but it is still a very healthy rate of increase.
There are two aspects of the figures which are particularly remarkable. The first is the different performances of the various sectors.
The decline of parts of manufacturing - shown most clearly by a 13.5 per cent decline in "plant and machinery operatives" over the past two years - shows that fears about a shakeout in this sector due to competition from low-cost countries has some foundation, even if the sector has been more stable in recent months.
And more significantly there has been a huge rise in job numbers across the services sector and in construction. The only other sector that is suffering is the hotel and construction industry. Perhaps all the "rip-off Ireland" stories are hitting home.
The second key factor is the change in the kind of jobs being created. An analysis by Goodbody stockbrokers points out that in 2002-2003 employment growth was mainly in the private sector and in part-time work.
Clearly private-sector employers were suffering from difficult international conditions and nervousness at home. Now, however, the private sector has taken over, accounting for more than eight out of 10 of the new jobs created over the past year.
As well as encouraging people to have larger families, rising wealth and job numbers are encouraging immigration, according to separate CSO population figures yesterday.
Many of the immigrants will add to the jobs pool. However, the signs are that the economy is now back at close to full employment. Long-term unemployment is now down to 26,300, and the CSO points out that there is a decline in the number of people now looking to enter the jobs market.
The boom years had, in particular, encouraged many women to return to the workforce, but the female participation rate in the jobs market is now stuck at just under 50 per cent.
The boom of the late 1990s was fuelled in part by a huge supply of labour from the unemployed, from young people entering the jobs market and from people returning to the workforce. Future labour supply will be more limited, putting a constraint on the growth rate.
The challenge for policymakers is to maintain unemployment at its current low. In many of the arguments about the gaps between the rich and poor, it is often forgotten that the increase of some 700,000 in the number of people at work since the early 1990s has transformed our economy and society.
The current job trends are encouraging. However, the economies that continue to prosper will be flexible ones. So far Ireland has coped well, with the rapid growth in services employment picking up the slack from manufacturing.
With competition growing internationally for many service jobs as well as those in manufacturing, small economies like Ireland will have to continue to run fast just to stand still in holding unemployment down.