Ibec claims Irish labour market is stabilising

Employment will not fall further after this year, a new jobs report by employers’ group Ibec suggests.

The labour market will stabilise in 2013, but a “robust” domestic recovery will not take place until “2014 at the earliest”.

According to an Ibec employee index, around 55 per cent of firms plan no change in their staff numbers in the fourth quarter, while almost a fifth plan to take on new staff. The medical devices, telecoms and pharmaceutical sectors are the most optimistic about hiring new staff.

The business group is lobbying Minister for Finance Michael Noonan ahead of December’s budget, imploring him to avoid increasing income taxes or announcing other measures that add to the cost of hiring.

“Tackling unemployment is the key challenge facing Government, and this needs to be reflected in the measures taken in Budget 2013,” said Ibec senior economist Reetta Suonperä.

A stabilisation in the labour market next year is largely expected because the impact of cuts to public sector employment will recede, while the rate of decline in the domestic economy will slow.

The “relatively bleak” headline numbers in employment mask “a considerable degree of volatility and sectoral divergence”, says Ibec, highlighting the “dual nature” of the labour market.

The first 10 months of the year have seen the announcement of 20,000 jobs, it reports, with more than a third of these created at companies supported by foreign direct investment agency IDA Ireland.

Major job announcements in the third quarter of 2012 include the addition of 2,000 jobs at the energy company Element Power in the Midlands, 510 at home care provider Bluebird Care, and 400 at the financial services company Northern Trust in Limerick.

Ibec forecasts the numbers in employment will fall by a little more than 1 per cent this year, with unemployment peaking close to 15 per cent.

“We have a two-speed labour market, with high-skilled, export-oriented sectors beginning to add jobs but the domestic economy continuing to cut employment,” Ms Suonperä said.

“Retraining and education must be prioritised to avoid a skills mismatch for vacancies in the future when the job market recovers.”