FÁS: 15,000 building jobs to go as growth slows

EMPLOYMENT in Ireland is expected to grow by 60,000 this year — but up to 15,000 jobs will be lost in the construction sector, FÁS claimed yesterday.

It said unemployment is expected to remain just below 5% next year as the rate of immigration moderates in line with jobs growth.

FÁS said the Irish labour market has continued to deliver a strong rate of employment growth of almost 4%, or an additional 77,000 jobs, and a low level of unemployment with the long-term unemployment rate falling to an historical low of 1.2% in the first quarter of 2007.

However, it said the rate of employment growth has now begun to moderate and two contrasting trends seem to be emerging.

“On the one hand the demand for service workers has remained strong while on the other hand demand for construction workers has weakened,” it said.

“The positive economic outlook augurs well for jobs growth this year, with employment forecast to increase by 3% or 60,000 to almost 2.1 million, while employment growth is forecast to moderate significantly in 2008 to just over 1%, an extra 23,000 jobs are still expected,” the report also said.

FÁS said the majority of the new jobs for the 2007-2008 period will come from the services sector, where it expected 70,000 jobs to be created.

However, in the construction sector, it predicted that over the next 18 months the numbers of jobs will drop by 15,000 as employer demand responds to a lower level of housing output.

“Over 320,000 PPS numbers were issued to persons from the EU10 member states in the first three years of EU enlargement, with four out of five migrants coming from Poland in the third year. While migratory flows from central Europe remain strong they have begun to moderate since peaking towards the end of 2006. We forecast net migration to halve from 60,000 this year to 30,000 in 2008 as migrants adjust to the looser labour market.

“The average unemployment rate is likely to remain below 5% for 2008 as inward-migration slows, while the numbers unemployed are forecast to rise from 99,000 in 2007 to 110,000 in 2008.”

FÁS said earnings growth in most sectors has just about kept pace with inflation, resulting in little or no real increase in wages. More rapid earnings growth has been experienced by the lowest paid as a result of two minimum wage increases in 2007, meaning Ireland now has the highest minimum wage for full-time employees in the EU after Luxembourg.

However, only 3% of the full-time workforce is on minimum wage, minimising the economic effect.

FÁS economist Brian McCormick said: “The labour market has begun to transition from a period of high employment growth to a more moderate rate of job creation. While job losses in the construction sector seem inevitable as housing output declines, an increasing emphasis on housing quality will soften the negative impact on employment.”

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