The fall in the unemployment rate to 4.3 per cent in February, shown in the latest data from the Central Statistics Office, underlines again how forecasters underestimated the resilience of the jobs market. Through Covid-19 – with Government supports – and now through the cost-of-living crisis, the unemployment level has remained near historic lows. As the pandemic took hold, economists were warning about long-term damage to the jobs market and a legacy of higher joblessness. In the event, the State remains in the grip of a labour shortage.
Ireland is not unique here. The upheavals of Covid-19 have created similar issues in many other countries. But the increase in employment here – by close to 69,000 last year to 2.57 million – shows that underlying economic growth in Ireland is ahead of many other countries. This trend is now being challenged, however, by infrastructural problems and particularly a lack of housing.
It is striking to hear Chambers Ireland, the umbrella body for the State’s chambers of commerce, tell an Oireachtas committee of the extent of the problems this is causing, which are so extreme that in some cases companies have bought houses and even considered seeking to buy entire estates to rent to employees. In smaller businesses, contracts are being turned down due to a lack of staff, again in many cases linked back to the housing shortage.
Demand for labour remains high – listings by jobs site Indeed are almost 60 per cent ahead of February 2020, just before the pandemic hit. But if Ireland fails to tackle its big infrastructure deficits, the risk in the medium term is of investment and jobs being hampered. Housing is not the only issue here – the availability of green energy is another, along with the general inadequacies of Ireland’s economic and social infrastructure.
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Public spending minister Paschal Donohoe spoke in the Seanad yesterday about the importance of delivering on the National Development Plan. While this work may not be glamorous, it is vital for Ireland’s economic prospects in the years ahead.