Jobs growth expected to slow dramatically next year

There was never a better time for returning emigrants to savour the employment opportunities at home, as evidenced by the plethora…

There was never a better time for returning emigrants to savour the employment opportunities at home, as evidenced by the plethora of jobs fairs spearheaded by FAS this Christmas.

However, the State training agency has received an internal report on labour market trends which predicts that jobs growth will slow dramatically in the year 2000.

According to its Review of Labour Market trends in 1999 and Outlook for 2000, it estimates that employment growth next year will be 3.2 per cent, compared with 7 per cent in 1999. In human terms, that means that 51,000 extra people will enter the workforce, compared with 109,000 this year.

The underlying reason for the fall-off is an anticipated reduction in the rate at which the economy is expanding. The review is predicting growth of 6.25 per cent next year, compared with 7.25 per cent this year.

READ MORE

Wage trends are also expected to affect jobs growth. With talks on a new national agreement yet to conclude, it is difficult to anticipate the effects of wage trends on overall employment patterns.

There is provision for only a 1 per cent increase in pay under the last phase of Partnership 2000, but many private sector agreements run out in March. The new national minimum wage, which is due to come into force from next April, adding at least 1.6 per cent to the annual wage bill for employers, is also expected to have a calming effect on jobs growth.

Unions will be pressing for this to be increased from the current proposal of £4.40p an hour to around £5 in the current talks.

Whatever the outcome of the negotiations - including the possibility of a free-for-all - many individual employers have yet to make allowance for this in their growth plans.

Regardless of these factors, unemployment will continue to fall rapidly, according to FAS, as natural growth in the labour market will continue to outstrip the internal supply. Next year, FAS predicts, unemployment rates will drop to 5 per cent or below, compared with an average of 5.7 per cent for this year and 14.8 per cent just five years ago.

Most media attention has been concentrated on campaigns to woo emigrants home during the festive season, or on examining the implications of large-scale immigration by EU nationals and others, including asylum-seekers. Until 1997, more people left Ireland than arrived. Last year the net inward flow was 18,500.

However, the fact remains that school leavers, graduates, the unemployed and women in the home will continue to be the main source of new recruits to the labour market for the foreseeable future.

In the past year alone, the number of people on the live register fell by 17 per cent, or 36,000.

Long-term unemployment and youth unemployment fell most sharply, suggesting that current job schemes and policy initiatives are reducing hard-core unemployment significantly.

About 10,000 more unemployed people are expected to join the workforce in the coming year, filling 20 per cent of all new jobs. The continuing rise in the number of female participants in the workforce remains the main source of additional labour.

The percentage of women who go out to work has risen from 30 per cent to over 48.5 per cent, while male participation has risen from 60 per cent to 70 per cent. The percentage of women aged between 20 and 24 who are in employment is 79.3 per cent. This compares with 85 per cent for men in the same age cohort.

The gender gap is much wider in older age groups, and also in the 15 to 19-year-old cohort, suggesting that more girls than boys are continuing their education.

Private sector employment grew by 99,000 and public sector employment by 5,000. The number of people on schemes fell by 1,000. Overall the number of people at work was 1.67 million, of whom 309,000 were in the private sector.

Every region has also experienced employment growth. It was strongest in the mid-west, mid-east and south-east, although the highest fall in the level of unemployment was in Dublin.

Unemployment now stands at 4.5 per cent in Dublin, compared with 8.6 per cent in the Border region, which continues to suffer the worst employment problems.