The latest unemployment figures, showing a jobless rate of 4.3 per cent in March, are further evidence of the resilience of the employment market. Despite the buffeting, first by Covid shutdowns and then by soaring inflation, the level of unemployment remains at a record low.
While experts had fears that Covid would leave behind a legacy of stubbornly high joblessness in the domestic sectors of the economy, in fact a shortage of labour has emerged. Meanwhile, despite the lay-offs in the tech sector, job numbers in this area have still held up. Further tests lie ahead as a second wave of redundancies is announced in some companies.
In almost all sectors of the economy, significant shortages of available employees with the relevant experience remain in evidence. Ireland is not unique here – the upheaval of jobs markets during Covid has led to labour shortages in many major economies. In turn this has increased worries about inflationary pressures taking hold, as employees in a tight market are in a better position to demand higher wages.
The strong position in the Irish jobs market gives some confidence about the wider economic outlook. It has supported consumer spending and income tax receipts. The rate of employment growth is likely to slow – given the losses in areas like tech. Fears of a global slowdown, due in part to the upward move in interest rates, may also affect Ireland. But with employment at a record high of close to 2.6 million and many companies still crying out for employees, there should be some leeway in the months ahead.
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This cannot be taken for granted. In particular, Ireland’s infrastructure deficits – notably in housing – are a threat to our economic future, as well as the social fabric of society. Huge challenges lie ahead in the climate transition, where Ireland’s competitiveness demands that the drive to provide clean, green energy succeeds. The current strong jobs market is the result of decisions taken over many years. It is now time to consider the vital foundations for future success.