News

Irish Job Growth booms and Inflation Increases

Published On:  Mon, Feb 26th, 2007
Contributed By:  Austin Hughes, IIB Bank

Construction and healthcare account for the bulk of job growth but most other sectors also report employment increases.

Irish inflation rises to 5.2% from 4.9% but falls well short of some fears.

Two important pieces of economic data published on Thursday suggest that Irish job growth remains very strong, and quite exceptional by international standards. Meanwhile, Irish inflation pressures have increased of late and are somewhat greater than elsewhere.

Some domestic commentary may focus on the acceleration in inflation and/or the importance of construction and health sector jobs to the employment outlook. However, we think the details of Thursday’s data generally paint a generally positive picture of the Irish economy at present.

There were 86,000 more people at work in Ireland in the final quarter of 2006 than a year earlier. So, Thursday’s numbers suggest the pace of employment growth is still exceptionally strong and has eased only slightly of late.

As has been the case for some time, construction and healthcare have been the key drivers of Irish job growth. Together these accounted for 47,000 of the 86,000 extra jobs in the past year.

Encouragingly, Thursday’s job figures suggest an improving trend in manufacturing. Employment in this sector was 1.4 per cent higher than a year ago notwithstanding substantial job losses.

The continuing importance of migration to the Irish job market is again highlighted by Thursday’s data. The CSO estimates that non-Irish nationals accounted for 44,000 or almost 52% of the increase in employment in the past year.

As 41,000 jobs were taken by Irish nationals and there was a drop in unemployment among Irish nationals of 5,000, these data offer no evidence of ‘displacement’.

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