FÁS expects employment figures to rise by 24,000 — then plummet
In its latest quarterly commentary, FÁS economist Brian McCormick said Ireland had continued to enjoy above-average job growth compared to its European counterparts, but that the worsening economic climate was about to hit home.
“Given the worsening economic outlook, we are increasingly convinced that the negative employment growth scenario envisaged previously will indeed come to pass,” said Mr McCormick.
“While we are forecasting that the annual average employment level will rise by 24,000 in 2008, the trend is expected to turn negative in the second half of the year. There is every reason to believe that this will continue into 2009, with net job losses of 31,000 forecast.”
He said the primary drag on the labour market was the continued slowdown in the construction sector, which he said was being exacerbated by tighter credit conditions.
FÁS also predicted the average unemployment rate will rise from 4.6% in 2007 to 5.5% in 2008 and up to 7% in 2009, with the total number of unemployed reaching 170,000 by the end of next year.
Mr McCormick’s forecast slump in construction was, to some extent, borne out by the latest Central Statistics Office’s construction employment index which estimated that there had been a 15% drop in construction jobs over the past 12 months to the lowest level for the past eight years.
However, the Construction Industry Federation said the index was only a guide and it used as its main guide, the CSO’s quarter survey.
The latest of those surveys showed there were 274,400 people working in construction at the end of March.
Martin Whelan, of the Construction Industry Federation, said it believed the figure could drop to approximately 260,000 — on a par with levels at the end of 2005.
