Davy halves jobs forecast

EMPLOYMENT could rise the least in two decades this year according to Davy, the country’s largest securities firm.

Davy halved its forecast for employment growth for this year from 1% to 0.5% yesterday due to a slump in house building.

That would be the weakest performance since 1991, when payrolls fell by 0.3%.

The slowdown in residential construction, a sector that employs about 13% of Ireland’s workforce, will cost the economy 50,000 jobs this year, according to Davy.

But this will be partly countered by hiring for infrastructure and commercial development projects, it said.

Also, hiring in the services industries may help limit the increase in unemployment to 5.5% by the end of the year from 4.9% in January, Davy added.

Agriculture is also set to experience marginal job growth, but industry will be static.

Davy economist Rossa White said: “The good news is that so far the labour force seems to be adjusting in line with job losses in housing.

“We assume that trend will continue, spurred by slower net inward migration. That means that the unemployment rate may not rise too far — we project a rate of 5.5% by year-end.”

Earlier this month, Ulster Bank chief economist Pat McArdle said he expects construction employment to fall by 20,000 this year but added that this will be outweighed by 40,000 new jobs in services, causing total employment to rise by 0.9%.