Mr. Nigel Nagarajan:

My perspective is that this is the wrong way to approach the issue. Deputy Donnelly is correct that demand needs to increase if there are to be jobs, and everyone recognises that. However, the issue here is the way in which demand returns to higher levels. What we saw in Ireland was that at the peak of the bubble, because of the excessive concentration on construction, construction activity formed approximately one fifth of GNP and one in seven jobs were in construction. The sharp rise in unemployment that Ireland has experienced is in large part a reflection of the unsustainable rise in construction as a share of GDP. In fact, half of the increase in unemployment in Ireland since the busting of the bubble is from the construction sector.

My point was on how demand will come back. If demand comes back in the form of another construction bubble then there will be no problem finding jobs for unemployed construction workers, but that is unlikely to happen. What is likely to happen is that demand will come back in a more balanced way and construction will not be such a heavy feature of demand. It is critically important that we equip the unemployed with the skills that are likely to be needed when demand returns. If demand comes back in a different, more balanced form, then we need to ensure, for example, that ex-construction workers are given access to training that could help them to take up the new jobs that are being created, not all of which will be construction jobs. That is why thinking about the relationship between demand and supply is not as simple as Deputy Donnelly's question seemed to imply.