THE NUMBERS employed in the private sector, excluding construction, will return to “pre-crisis levels” by 2016, according to a report by employers’ group Ibec, but an economic analysis by Ernst & Young suggests it will be 2030 before employment rebounds.
The Ibec survey, published ahead of its chief executive conference in Dublin today, found that more than one-third of private companies intend to increase employment in 2012, while 60 per cent plan to have a larger workforce by 2016.
In total, 205 firms were surveyed for the report which was undertaken in October by the employers’ group and PwC consultants.
The report, “Irish business beyond the recession”, found that while the recovery in the Irish economy was “well under way” in 2011, it was “two-speed in nature”, with exporting firms recording strong growth and domestic businesses experiencing further revenue declines.
Ernst & Young’s winter forecast suggests Ireland’s economy will return to recession in the second half of the year, but the overall growth rate for 2011 will be higher than expected.
The forecast warned that uncertainties in the euro zone, the recession in the construction sector and a lack of significant job creation in the economy was leading to a subdued economic mood in the State.
Lower growth prospects for the euro zone, UK and US may also hit Irish exports in the coming months. Ernst Young downgraded growth prospects in Ireland’s export sector for 2012 from 5.1 per cent to 3 per cent
The Ibec survey found business turnover will expand by 5 per cent in 2012, though sales will be strongest in the export sector, with the majority of domestic firms expecting turnover to stabilise.
Irish companies expect exports to drive the economic recovery, with indigenous firms expecting domestic sales to rise by 22 per cent and exports to advance by 44 per cent over the next five years.
Just over half of all firms intend to maintain existing staffing levels in 2012, while a third expect to increase employee numbers by an average of 15 per cent. Some 15 per cent of firms expect to reduce staff numbers by an average of 17 per cent.
Significantly, the retail sector, which has shed approximately 50,000 jobs over the course of the recession, according to Ibec, has positive employment expectations for the coming years.
Almost 55 per cent of retail firms – a traditionally employment-intensive industry – expect to increase their workforce over the next five years.
According to Ibec director general Danny McCoy, the survey shows that Irish firms are planning for a “bright future” despite the ongoing global economic uncertainty.
“Companies continue to have ambitious employment and investment plans for next year and the period out to 2016,” he said.
