There are clear signs of a change in the jobs market. Over the past few years, total employment has risen at a phenomenal rate, with strong growth in many sectors and relatively few job losses. The announcement of more than 500 redundancies yesterday in Dublin and Ballina is the latest indication of a changing environment. Job losses look to be picking up, while the shortage of people looking for work is acting as a constraint on new investment and job creation.
This does not mean that the economy is about to collapse into recession. But it does suggest that growth this year - while still reasonably strong - could be a good deal slower than the record rates recorded over the past few years.
The factory closures announced yesterday will have come as a nasty shock to those losing their jobs. Many of the 220 people made redundant at Henniges car component plant in Ballina, Co Mayo, are likely to find it difficult to find new jobs in that area; those losing their jobs in Dublin may find it easier to get fresh employment.
Both closures result from manufacturing being consolidated by international groups in fewer locations. Henniges is moving its production to Germany. While it blames wage inflation, it must be pointed out that Germany is the highest labour-cost region in Europe. ThermoKing, the refrigeration vehicle company, is also undertaking a worldwide restructuring, but is fortunately retaining its plant in Galway.
This trend towards the restructuring of multinational operations looks set to continue, particularly if the US economic downturn gathers pace. Also, manufacturing operations in lower value-added sectors such as clothing will continue to relocate to countries where labour is cheaper.
There is a clear imperative to make Ireland as attractive as possible for higher-value industry. This has implications for industrial and education policy and for the general environment created for business.
What of regional policy? Mr Norman Tebbitt, when he was a member of Mrs Thatcher's government, once famously encouraged the unemployed to "get on their bikes" and move house if necessary to get work. But our policy cannot be based on this principle. Instead, the aim must be to spread development to the less well-off regions, not only for social reasons, but also because the Dublin region is heavily congested.
This is a challenge for IDA Ireland - which in the short-term will be looking for a replacement industry for Ballina. It is also a challenge for our policy makers, who must ensure that the necessary infrastructure in terms of roads, airports, energy and telecommunications are in place in the BMW regions. If they are not, then industry will not prosper. It is extraordinary, for example, that industries requiring high-energy supplies cannot be accommodated in some parts of the State.
A decade ago, the Culliton report highlighted the importance of a range of policies in attracting and building a successful industrial sector. The formula which emerged, which has worked well in the meantime, now needs to be changed to focus clearly on higher-value industries and regional development.