Tens of thousands more jobs will be created over the next year and continued immigration will be required to help fill them, FÁS predicted yesterday.
In an upbeat quarterly labour market commentary, the State training and employment agency said the number of jobs in the economy was likely to increase by 32,000 in 2005. This would follow employment growth of 2.4 per cent, or 44,000 jobs, this year.
The strong demand for workers was being met by increased supply, it said, with the result that labour shortages had been avoided. This was partly due to increased immigration from the new EU member-states, which was important to labour force growth.
Recent data suggested that the number of workers from the 10 new member-states seeking employment in Ireland had risen sharply since EU enlargement on May 1st, the agency said. Since that date, people from the 10 states have been free to take up employment in the Republic, and do not have to secure work permits.
FÁS said that in the first four months after enlargement, 31,416 people from the new member- states had obtained PPS (personal public service) numbers, which all employees must hold.
This was approximately 10 times the number of work permits issued to people from the same countries in the first four months of the year. Nevertheless, there had been no significant displacement of Irish nationals with workers from the 10 states, as borne out by a continued low unemployment rate.
The potential to increase the labour supply domestically would lessen over the medium term. This was because of a drop in the number of people who were "inactive", while the numbers coming out of the education system were falling.
"Therefore, labour force growth will continue to be supported by immigration." However, immigration flows were expected to moderate next year as the "big bang" effect from enlargement wore off.
The most rapid employment growth in the recent past has occurred in the construction sector, with almost 15,000 net new jobs created between the second quarters of 2003 and 2004.
Employment in services also grew, although the hotels and restaurant sector suffered a net loss of almost 7,000 jobs.
Manufacturing employment also fell but the sector is showing "definite signs of recovery" from the job losses of the 2001 to 2003 period, FÁS said .
With employment growth expected to match labour force growth, the numbers unemployed should remain stable.
It forecast that the unemployment rate would average 4.5 per cent this year, before falling marginally to 4.4 per cent in 2005.
Ireland has the third lowest unemployment rate of the 25 states, behind only Austria and Luxembourg. Unemployment in the EU averages 9 per cent.
